UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




Form 10-K





(Mark
One)




þANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934




For the
fiscal year ended December 31, 2009




or




 ̈TRANSITION REPORT UNDER SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934




For the
transition period from __________________ to
__________________________




ODYSSEY
OIL & ENERGY, INC.


(Name
of registrant as specified in its charter)




Florida
            333-106299
            65-1139235(State
      or other jurisdiction of
              incorporation
      or organization)
            (Commission
      file number)
            (I.R.S.
      Employer
              Identification
      No.)




18 George
Avenue


Rivonia,
2128 South Africa


(Address
of principal executive offices) (Zip Code)




Registrant's
telephone number, including area code: +27
(11)  807-1446




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


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




Common
Stock, par value $ 0.0001 per share


(Title
of class)




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.


 ̈Yes þNo




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.


 ̈Yes  þNo




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 þNo  ̈




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 ofRegulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Not
Applicable.




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. þ




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company:





Large
      accelerated filer
             ̈
            Accelerated
      filer
             ̈Non-accelerated
      filer
              (Do
      not check if a smaller reporting company)
             ̈
            Smaller
      reporting company
            þ


Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act)
 Yes  ̈No þ





State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked prices of such common equity, as of the last
business day of the registrant's most recently completed second fiscal
quarter.




As of
April 14, 2010, the aggregate market value of the voting stock held by
non-affiliates of the registrant based on a value of $0.98 per share
on June 30, 2009 was $123,888,170.




Indicate
the number of shares outstanding of each of the registrant's classes of common
stock, as of the latest practicable date. 228,566,500 shares of common stock are
issued and outstanding as of April 14, 2010.









TABLE
OF CONTENTS




PART
      IITEM
      1
              
              DESCRIPTION
      OF BUSINESS
              
              1ITEM
      2
              
              DESCRIPTION
      OF PROPERTIES
              
              6ITEM
      3
              
              LEGAL
      PROCEEDINGS
              
              6ITEM
      4
              
              REMOVED
      AND RESERVED
              
              6PART
      IIITEM
      5
              
              MARKET
      FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
              
              6ITEM
      6
              
              SELECTED
      FINANCIAL DATA
              
              7ITEM
      7
              
              MANAGEMENT’S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
              
              7ITEM
      8
              
              FINANCIAL
      STATEMENTS
              
              12ITEM
      9
              
              CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURES
              
              12ITEM
      9A
              
              CONTROLS
      AND PROCEDURES
              
              12PART
      IIIITEM
      10
              
              DIRECTORS,
      EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION
      16(A) OF THE EXCHANGE ACT
              
              13ITEM
      11
              
              EXECUTIVE
      COMPENSATION
              
              16ITEM
      12
              
              SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS
              
              16ITEM
      13
              
              CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE
              
              17ITEM
      14
              
              PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
              
              19SIGNATURES
              
              
              
              24









ITEM
1 DESCRIPTION OF BUSINESS




Overview
of the Company and its Prior Strategy




Advanced
Sports Technologies, Inc. (AST) was incorporated in the state of Florida on
August 9, 2001.




The
Company's initial efforts were focused on developing and marketing
premium-quality, premium-priced, branded fitness and exercise equipment to the
home fitness equipment market. Our original business plan included marketing
products directly to consumers through a variety of direct marketing channels,
including spot television commercials, infomercials, print media, direct
response mailings and the Internet. Initial consumers targeted for the Company's
efforts included health clubs and gyms, rehabilitation clinics, hospitals,
colleges and universities, hotels and motels and the military and governmental
agencies.




AST
licensed the rights to a portable gym subject to patent protection in the United
States, which may be marketed under the trademark Better Buns. It was the
Company's intention for this product to be its first direct-marketed product,
although the Company was unsuccessful in its attempts to raise funding for
marketing. All patents, trademarks and other intellectual property associated
with the Better Buns product are owned by, and the Company's license agreement
was with, Exerciting LLC, which is owned by the brothers of the Company's former
President and sole director. Prior to the Merger (as defined below and discussed
herein), the Company was searching for other products to license or acquire for
introduction. AST has not generated any revenues through the sale of the Better
Buns product or otherwise and has not engaged in any research and development or
marketing activities due to limited funds and resources.




In May
2005, the Company received notice that it was in breach of its license agreement
with Exerciting, LLC for the Better Buns product and that the license was being
terminated.




The
Merger




On
September 23, 2005, the Company changed focus through a merger with
CardioBioMedical Corporation. We created a wholly owned Delaware subsidiary for
the purpose of merging with CBM, a Delaware corporation. With the consent of
shareholders holding over 95% of the shares of CBM entitled to vote, the Sub
merged with and into CBM with CBM being the surviving corporation. CBM then
became a subsidiary of the Company and the separate existence of Sub
ceased.




The
consideration for the Merger consisted of 22,077,509 shares of AST common stock,
$.0001 par value, payable to the shareholders of CBM and a warrant, exercisable
beginning January 1, 2008, to purchase 6,500,000 shares of AST common stock at a
purchase price of $.01 per share payable to the sole warrant holder of CBM. At
the effective time of the Merger and without any action on the part of CBM
stockholders, each one share of CBM common stock (except for shares held in
treasury and dissenting shares) was converted into the right to receive one
share of common stock of the Company, and the CBM warrant referenced above was
exchanged for an equivalent AST warrant.




Further
in connection with the Merger, the Board of Directors accepted the resignation
of Curtis Olschansky as sole director and officer of the Company and elected
James F. Mongiardo to fill the vacancy on the Board. Mr. Mongiardo was also
elected to serve as Chief Executive Officer and President of AST.




CBM was
formed in May 2003 to commercialize, in licensed territories, devices
incorporating proprietary and patented technology relating to a new scientific
technique applying bio-cybernetic principles and frequency analysis in
non-invasive medical devices. CBM currently is a party to a non-exclusive
license from a patent holder to sell a proprietary device in designated
territories and has a commitment from such patent-holder to perform consulting
services for CBM at its request.




1




The
Medical Problem




According
to the American Heart Association's latest cardiovascular disease statistics
(estimates for 2002), cardiovascular disease is the number one killer in the
United States. Cardiovascular dysfunction, especially atherosclerosis (hardening
of the arteries) and its manifestations, debilitates nearly 13 million Americans
and annually causes approximately 900,000 deaths in the United States. The main
cause of cardiac death is acute myocardial infarction. Myocardial infarction
refers to the injury or death of heart muscle and tissue because of interrupted
blood flow to the area, typically as a result of atherosclerosis. An acute
myocardial infarction will occur in 1.2 million people in the United States each
year, 500,000 of whom will die during this acute event. Among those who
experience sudden cardiac death, coronary artery disease ("CAD") is the main
cause of death. A very important risk factor is "silent" ischemia (or restricted
blood flow), i.e. the asymptomatic form of CAD.




In 1903,
Willem Einthoven devised the string galvanometer to indicate and graphically
record changes of electric potential at various points on the exterior surface
of the human body caused by contractions of the myocardium or heart muscle. His
invention became the electrocardiogram ("ECG"). ECG devices measure the
electrical impulses generated by the myocardial cells. The standard ECG test
records the positive and negative electrical waves resulting from each
heartbeat. This means that a standard ECG study examines the electrical output
in the time domain, i.e., a one-dimensional examination. This can limit the
amount of data generated and, accordingly, the diagnostic value of the device.
While the standard ECG is not invasive, it is also of low accuracy (50-55% for
CAD) and is insensitive to ischemia according to the Yale University School of
Medicine Heart Book.




In order
for a physician to get a more accurate understanding of the coronary risk
associated with a patient, more expensive, complicated and riskier diagnostic
procedures are available. If CAD can be detected at an early stage, there exist
multiple treatment regimens that may effectively treat CAD.




The
Product




As noted
above, CBM has a non-exclusive license to market a proprietary medical device
designed for the non-invasive early diagnosis of coronary artery diseases,
particularly myocardial injury caused by ischemia, in the United States, Canada
and Mexico. The product, known as the Cardio Spectrum Diagnostic System ("CSD"),
has received approval under Underwriters Laboratories, Inc.'s electrical safety
standards (UL-2601), the European Union's standard for marketing a medical
device (CE) and the Federal Communication Commission's standards for marketing a
computer. In addition, CBM received 510(k) clearance from the U.S. Food and Drug
Administration to market the CSD in the United States.




The basic
concept underlying the proprietary technology incorporated in the CSD is the
recognition that time domain myocardial electrical signals can be transformed
into frequency domain and then analyzed. This concept is easily understood
through the example of sunshine. To the naked eye, sunshine appears to be white.
Scientists, however, regard sunshine more precisely as a spectrum in which one
can see that the white comprises an infinite array of colors just like a
rainbow. Similarly, the electrical signals given by the ECG can be transformed
from the time domain into the frequency domain and then analyzed. It is our
contention that this frequency domain gives a more complete and accurate
assessment of the coronary disease status of a patient than other standard,
non-invasive coronary diagnostic procedures.




The CSD
is the culmination of 20 years of research and development. Included in its
software are over 20,000 patient test results. The procedure utilizing the
device is performed non- invasively while the patient is at rest, with the goal
of eliminating the risks associated with either exercise or the injection of
dyes or a catheter. After attaching the leads to the patient, the procedure is
completed in approximately 90 seconds. Results to date have shown that the CSD
is effective at non-invasively diagnosing CAD with more than 90% sensitivity and
specificity.




2




A
New Strategy




The
objective of the Company was to establish the CSD as the standard of care for
the detection of early-stage ischemic heart disease. Our strategy included first
establishing the system with cardiologists and then gaining acceptance and use
by other physician specialties and hospitals. We believed critical in U.S.
hospital market acceptance will be the cost savings of the CSD in both the early
detection of disease and the elimination of the need to perform multiple and
more expensive diagnostic procedures to determine a patient's cardiac
health.





Even
though the CSD may be marketed in the United States today, the Company believed
that the key to successful marketing here and elsewhere was the insurance
reimbursement. Historically, medical devices are not accepted by the medical
community or hospitals in any meaningful manner until there is associated
insurance reimbursement for use of the device. Therefore, one of the first
objectives of the Company was to obtain a "CPT Code" for the CSD. CPT codes
describe medical or psychiatric procedures performed by physicians and other
health-care providers. The codes were developed by HCFA (Health Care Financing
Administration, a government department that sets insurance reimbursement rates)
to assist in the assignment of reimbursement amounts to providers by Medicare
carriers. A growing number of managed care and other insurance companies,
however, base their reimbursements on the values established by
HCFA.





We
intended to seek a CPT code through a concentrated set of clinical trials that
was to begin with physicians associated with major teaching hospitals. The first
such trial was started at Cedars Sinai Medical Center in Los Angeles,
California. While clinical data was being generated to support a CPT code
application, we further intended to conduct additional clinical trials to "seed"
the market in the United States. We also expected that use of the CSD by
cardiologists at major teaching hospitals and other opinion leader locations
will have supported market introduction.







We
intended to sell the CSD to physicians including group practices, hospitals and
health maintenance organizations. We anticipated that marketing will focus on
its advantages, namely its sensitivity and specificity as a non-invasive
diagnostic tool to assist the physician in determining whether a patient has
CAD. We intended to use traditional vehicles to convey this message, including
medical journal advertising, direct mail and participation in medical meetings
and conferences. We also intended to market and sell the CSD through a hybrid
sales effort. In the United States, medical devices are sold through direct
sales forces, distributors or a combination of both. Because the CSD test
results include a suggested diagnosis, we believed that the CSD may have been
suitable for sale through distributors. To augment that effort and include key
account selling, e.g. hospital chains, we also anticipate hiring a small direct
sales force.





In
addition to a suggested diagnosis, the CSD test results gives the physician
additional diagnostic information about the coronary health of the patient. The
power spectrum, dual lead correlation and location results of the CSD test offer
an additional potential revenue source. We planned to offer physicians a service
to analyze this additional information to further assist the physician in
treating the patient.




3





Manufacturing
and Distribution





We
expected that the CSD would have been be supplied by its inventor, Professor Dan
Qun Fang. The product consists of commercially available hardware components and
proprietary software owned by Prof. Fang and licensed to CBM. Pursuant to the
license agreement for the CSD, CBM had the benefit of "most favored nation"
pricing, or pricing as favorable as that received by other sales
licensees/customers of the same products on comparable terms and
conditions.





Competition





The
market for medical devices is highly competitive and is served by a number of
well-established companies with recognized names. In order to effectively
compete, we would have been required to make substantial investments in sales
and marketing as well as research and development. Many products are sold by
companies with greater resources than the Company and there was no assurance
that we would have been successful in gaining significant market share for the
CSD or other products and product candidates or earning a return on our
investment in such products and product candidates.





Equipment
used by the physician as a diagnostic aid in determining whether a patient has
coronary artery disease includes electrocardiogram equipment, stress
electrocardiogram equipment, impedance cardiography equipment, echocardiogram
equipment, stress echocardiogram equipment, Thallium SPECT equipment, Ultra-Fast
CT Scan equipment, CT angiogram equipment, Pet Scan equipment and angiogram
equipment. In addition to competition from these devices and their respective
manufacturers, the Company believed that it would have had one primary direct
competitor, Premier Heart, which markets a two lead detection system known as
the 3DMPTsystem, as opposed to the 12 lead detection system used by the
CSD.




*
establish registration for device manufacturers (both domestic and foreign) and
importers,




* medical
device listing by firms that manufacture, re-package and re-label develop
specifications, reprocess single-use devices, remanufacture and/or manufacture
accessories and components sold directly to the end user,




* quality
system regulation, including requirements related to the methods used in and the
facilities and controls used for designing, purchasing, manufacturing,
packaging, labeling, storing, installing and servicing of medical
devices,




*
labeling requirements as well as descriptive and informational literature that
accompanies the device, and




* medical
device reporting to report incidents in which a device may have caused or
contributed to a death or serious injury.





As noted
above, the CSD system has received UL-2601, CE and FCC approval, and CBM has
received 510(k) clearance from the FDA to market the CSD in the United States.
We also intend to apply for a CPT Code for insurance reimbursement purposes.
Future products and product candidates will likely have to go through the pre
market notification or pre market approval process, and will be subject to the
applicable regulatory requirements discussed above. There can be no assurances
that approval would be granted for any future product or product candidate,
whether in the United States or elsewhere, on a timely basis or at all.
Furthermore, if approval is granted, the product or device would be subject to
continuing regulatory regulations and oversight. The approval process is
expensive and can take a long time to complete, and the cost involved in
satisfying applicable ongoing compliance requirements is high.




4





RESEARCH
AND DEVELOPMENT





The
Company did not invest in research and development for the Better Buns or any
other fitness product. Through December 31, 2007, CBM had invested $126,969 in
research and development activities for the CSD system. This amount has been
borne solely by CBM, and the Company does not expect in the near term to receive
external funding for research and development activities. These expenditures
have included retaining Averion, Inc., a clinical research organization, to
assist in the development of clinical protocols, monitoring of clinical trials
and analysis of data. CBM also pays for all expenses associated with its
clinical trials, including fees charged by the Institutional Review Board and a
fee per patient enrolled.




Our
New and Current Strategy




The
company was not having much success with CardioBioMedical Corporation and on
April 21, 2006, the ownership of CardioBioMedical Corporation was exchanged for
22,077,509 shares of Odyssey common stock with the original stockholders. In
addition, we changed the name of our company to Odyssey Oil & Energy, Inc to
reflect our new strategy.




On April
21, 2006, we began the realization of our new strategy by purchasing a 10%
working interest in oil and gas leases in Texas from Centurion Gold Holdings,
Inc., a related public company. During 2007, the well underwent various repairs
but none of the repairs were successful. On January 15, 2008 it was decided to
plug the well and abandon it. We do not expect to purchase other working
interests in oil and gas wells in the future. However, the company will explore
investments in other energy related enterprises.




On
November 21, 2007 we entered into a new phase of our strategy by acquiring a
Uranium Prospect known as Springbok Flats in the Bela Bela District of South
Africa. After numerous months of due diligence and some geological work on
samples provided to us, it was determined that it would not be viable to exploit
the Uranium deposit.On
October 24, 2009 the Company entered into a contract with MCA Capital Assets
(Pty) Ltd to mutually cancel the original acquisition agreement. The Company has
no further obligations in regards to the original agreement. All expenses have
been reclassified to discontinued operations on the statement of
operations.





On June
16, 2008, the Company acquired ALG Bio Oils Limited, which in turn owns 100% of
ALG Western Oils (Pty) Ltd. ALG Western Oils has the technology to make bio fuel
from algae and had entered into a Letter of Intent with Xstrata Alloys to begin
a bio fuel project at the Boshoek smelter in South Africa. The pilot plant was
completed during 2009 and the productivity of the algae growth and carbon
capture is being tested and modified where appropriate. This acquisition
continues the Company’s strategy of investing in energy related enterprises. The
Company intends to expand the making of bio fuels from algae to other large
mining Companies in South Africa.




On May
26, 2009, the Company acquired 51% of H-Power (Pty) Ltd. H-Power (Pty) Limited,
a South African registered company, which owns an exclusive license to develop
and market batteries based on patented Hybrid Battery Technology worldwide.
However, on August 27, 2009, the Company entered into an agreement to cancel the
purchase of the 51% of H-Power (Pty) Ltd. H-Power required substantial capital
as well as a partner to develop a production line for the batteries based on its
patented Hybrid Battery Technology. Despite making large loans to H-Power the
Company was not able to secure the needed financing or a substantial partner.
Under the circumstances, the Board of Directors believed it was in the best
interests of the Company to enter into the cancellation agreement. The agreement
called for the return of the 65 million common shares originally issued, the
return of 4 million common shares issued to consultants and the repayment of all
funds advanced since acquisition. On August 27, 2009 the agreement was
officially cancelled.




5





The
Company’s prime objective is still to invest in green and green energy related
projects.




EMPLOYEES




The
Company currently employs Arthur Johnson as its president and Nicolaas
Theunissen as its vice-president. On December 3, 2009, Mr. Johnson received five
million common shares valued for financial accounting purposes at $400,000 ($.08
per share) as compensation for prior years’ services. In addition, officer
compensation totaling $500,000 ($250,000 each) was accrued for the current year.
These individuals are also directors.




ITEM
2. DESCRIPTION OF PROPERTY




Our
principal office facility is presently located in space owned by our president.
During 2009, the Company recorded additional paid-in capital of $12,000 for
the fair value of rent and services contributed to the Company by its
president.




ITEM
3. LEGAL PROCEEDINGS




We are
not party to any legal proceedings as of the date of this Form 10
K.




ITEM 4.REMOVED AND RESERVED




None.




PART
II.




ITEM
5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
ISSUER PURCHASES OF EQUITY SECURITIES




Our
common stock was approved for an unpriced quotation on the Over the Counter
Bulletin Board on October 19, 2004.




As of
April 14, 2010, there were 128 shareholders of record of our common stock and a
total of 228,566,500 common shares outstanding.




We have
never paid any dividends and do not currently anticipate paying dividends in the
future. Any payment of cash dividends in the future will be dependent upon the
amount of funds legally available, our earnings, financial condition, capital
requirements and other factors that our Board of Directors may think are
relevant.




On May 1,
2008 the Company forward split the common shares of the Company on a basis of 3
shares for every 1 share held. As a result of the stock split, all share and per
share data have been retroactively adjusted to give effect to the stock
split.




6




There are
currently no outstanding options or warrants to purchase, or any securities that
are convertible into, our common stock. The single warrant to purchase 6,500,000
shares issued in connection with the CBM Merger was cancelled upon exchange of
ownership in CBM with the original stockholders.




ITEM
6. SELECTED FINANCIAL DATA




Statements
of Operations Information




Year
      ended
              Dec.
      31, 2009
            
            
            Year
      Ended
              Dec.
      31, 2008
            
            
            For
      the Period
              May
      28, 2003
              (Inception)
      to
              Dec.
      31, 2009Revenue
            
            $
            -
            
            
            $
            -
            
            
            $
            26,695Loss
      from continuing operations
            
            
            (16,809,356
            )
            
            
            (21,806,607
            )
            
            
            (39,101,453
            )Loss
      from discontinued operations
            
            
            (23,558,654
            )
            
            
            (304,437
            )
            
            
            (32,139,852
            )Loss
      from operations before income taxes
            
            
            (16,809,356
            )
            
            
            (21,806,607
            )
            
            
            (39,101,453
            )Net
      loss
            
            
            (39,622,892
            )
            
            
            (22,111,044
            )
            
            
            (70,496,187
            )Net
      loss per share basic and diluted:Continuing
      operations
            
            $
            (.08
            )
            
            $
            (.17
            )Discontinued
      operations
            
            
            (.11
            )
            
            
            -Total
            
            $
            (.19
            )
            
            $
            (.17
            )Weighted
      average number of shares outstanding during the period-basic and
      diluted
            
            
            213,494,725
            
            
            
            127,590,860




Balance
Sheets Information




Dec.
      31, 2009
            
            
            Dec.
      31, 2008Cash
            
            $
            4,907
            
            
            $
            1,196Total
      Assets
            
            
            735,496
            
            
            
            2,196Current
      Liabilities
            
            
            982,872
            
            
            
            642,703Total
      Liabilities
            
            
            982,872
            
            
            
            642,703Stockholders’
      (Deficit)
            
            
            (247,376
            )
            
            
            (323,643
            )





ITEM
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION




Certain
statements contained in this discussion and analysis or incorporated herein by
reference that are not related to historical results are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Statements that are predictive, that depend upon or refer to future
events or conditions, and/or that include words such as "expects,"
"anticipates," "intends," "plans," "believes," "estimates," "hopes," and similar
expressions constitute forward-looking statements. In addition, any statements
concerning future financial performance (including future revenues, earnings or
growth rates), business strategies or prospects, or possible future actions by
us are also forward-looking statements.




7




These
forward-looking statements are based on beliefs of our management as well as
current expectations, projections, assumptions and information currently
available to the Company and are subject to certain risks and uncertainties that
could cause actual results to differ materially from historical results or those
anticipated or implied by such forward-looking statements. Should one or more of
those risks or uncertainties materialize or should underlying expectations,
projections and assumptions prove incorrect, actual results may vary materially
from those described. Those events and uncertainties are difficult to predict
accurately and many are beyond our control. We assume no obligation to update
these forward-looking statements to reflect events or circumstances that occur
after the date of these statements except as specifically required by law.
Accordingly, past results and trends should not be used to anticipate future
results or trends.




OVERVIEW




AST was
formed in Florida in August 2001 with the plan of becoming a direct marketing
company that developed and marketed premium-quality, premium-priced, branded
fitness and exercise equipment to the home fitness equipment market. Our
original business plan included marketing products directly to consumers through
a variety of direct marketing channels.




As an
initial step, the Company licensed the rights to a portable gym subject to
patent protection in the United States, which may be marketed under the
trademark Better Buns. It was the Company's intention for this product to be its
first direct-marketed product. The Company was unsuccessful in its attempts to
raise funding to pursue this goal and, in May 2005, received notice that it was
in breach of its license agreement for the Better Buns product and that the
license was being terminated. Since inception to date, the Company had not
generated any revenues through the sale of the Better Buns product or otherwise,
and had not engaged in any research and development or marketing activities due
to limited funds and resources.




In
September 2005, the Company changed focus in connection with the Merger of a
wholly owned subsidiary of the Company and CardioBioMedical Corporation, a
Delaware corporation. The subsidiary merged with and into CBM, with CBM as the
surviving corporation and becoming a subsidiary of AST. The consideration for
the merger consisted of 22,077,509 shares of AST common stock, $.0001 par value,
payable on a one-for-one basis to the consenting shareholders of CBM and a
warrant, exercisable beginning January 1, 2008, to purchase 6,500,000 shares of
AST common stock at a purchase price of $.01 per share payable to the sole
warrant holder of CBM in exchange for an equivalent CBM warrant.





The new
objective of the Company was to establish a medical device, the Cardio Spectrum
Diagnostic System as the standard of care for the detection of early-stage
ischemic heart disease. The Company's strategy consisted of attempting to (i)
obtain insurance reimbursement for performance of the diagnostic test, (ii)
establish the device with cardiologists and finally (iii) gain acceptance and
use by other physician


specialties
and hospitals. The Company was unsuccessful in its attempts to obtain insurance
reimbursement and marketing CSD.





On
November 21, 2007 our Board of Directors authorized the purchase (the
“Purchase”) of one hundred percent (100%) of a Uranium Prospect known as
Springbok Flats in the Bela Bela District of South Africa. The rights were being
held through MCA Uranium One (Pty) Ltd, a 49% (forty nine percent) owned
subsidiary of Odyssey Oil & Energy, Inc. As a result of the Purchase,
the Company issued 15,000,000 shares of the Company’s common stock at a purchase
price of $0.28 per share. A further 10,000,000 shares of the Company's common
stock were to be issued on receipt of the mining license and a further
25,000,000 shares of the Company's common stock were to be issued within a
period of 18 months upon proving up of the Uranium Reserves. However, no further
shares were issued. On October 24, 2009 the Company entered into a contract with
MCA Capital Assets (Pty) Ltd to mutually cancel the original acquisition
agreement. The Company has no further obligations in regards to the original
agreement.




8




During
2007, the Leslie 1 Well of the BBB Area in Wharton Texas underwent various
repairs to try and get the gas to start flowing again. The worst possible
scenario occurred when it was discovered that the well had a split casing. All
the partners in the well decided to allow Ventum Energy, the wells operator, to
try and establish a gas pocket about half way up the well to trap the gas and
pump it out. None of the repairs were successful and the gas pocket did not
materialize. On January 15, 2008 it was decided to plug the well and abandon
it.




On June
16, 2008, the Company acquired ALG Bio Oils Limited, which in turn owns 100% of
ALG Western Oils (Pty) Ltd. ALG Western Oils. As a result of the purchase the
Company issued 35,000,000 shares of the Company’s common stock with a fair value
of $21,700,000. On June 22, 2009 the Company issued an additional 75,000,000
shares of the Company’s common stock with a value for financial accounting
purposes of $15,000,000 as a result of the purchase. An additional impairment of
$15,000,000 was recorded during the year ended December 31, 2009 as a result of
the issuance.This acquisition continues the Company’s strategy of investing in
energy related enterprises. The Company intends to expand the making of bio
fuels from algae to other large mining Companies in South Africa.





On May
26, 2009, the Company acquired 51% of H-Power (Pty) Ltd. As a result of the
purchase the Company issued 65,000,000 shares of the Company’s common stock with
a value for financial accounting purposes of $37,700,000. However, on August 27,
2009, the Company entered into an agreement to cancel the purchase. On March 16,
2010 material terms of this agreement were complied with, the Company cancelled
the 65,000,000 shares of the Company’s common stock and returned them to
Treasury. The Company also received the first installment of its repayment of
advances made of $91,000.





On
October 24, 2009 the Company entered into a contract with MCA Capital Assets
(Pty) Ltd to mutually cancel the original agreement for the acquisition of the
Uranium Prospect referred to above. The Company has no further obligations in
regards to the original agreement. All expenses have been reclassified to
discontinued operations on the statements of operations.





Excluding
the impairment of the bio-fuels development contract relating to the acquisition
of ALG Bio Oils Limited, total operating expenses increased to $1,781,424 from
$67,236 for the year ended December 31, 2009. The increase was primarily due to
consulting fees expensed of $786,770 relating to its ALG Bio Oils Limited
subsidiary and officer compensation expensed of $900,000. The consulting fees
were primarily in payment of technological and promotional services
rendered.





Total
current assets consist of cash of $4,907, loans receivable of $729,589 and
website costs of $1,000. Total liabilities consist of accounts payable and
accrued expenses of $557,842 and amounts due to related parties totaling
$425,030. Global Investment Group, Inc. and various related parties of ALG Bio
Oils Limited funded all operating costs and will continue to do so. Management
has received verbal assurances from these related parties that such funding will
continue as needed.





PLAN
OF OPERATIONS




During
December 2006 the well was shut down for some major repairs. Mud had leaked into
the well and reduced the gas flow significantly. The well was brought back
online and gas started to flow in February 2007. Our share of the repair costs
was $12,554. The well was again shut down soon after starting up again due to a
significant loss of pressure in the well. It was found that the casing had in
fact cracked and the only way to repair the well was either to re-drill the well
at an enormous cost or try and trap the gas in an anomaly half way up the well.
The latter was tried but also proved to be unsuccessful. Our share of the costs
was $14,238. In January 2008 it was decided to abandon the well.




9




The
company does not intend to expand by acquiring additional working interests in
other oil and gas wells.




On
November 21, 2007 the Company purchased a Uranium Prospect known as Springbok
Flats in the Bela Bela District, South Africa. The rights were being held
through the company MCA Uranium One (Pty) Ltd a 49% (forty nine percent) owned
subsidiary of the Company. The Company decided not to proceed with the
exploration and exploitation of the Uranium Prospect as it would not have been
financially viable. On October 24, 2009 the Company entered into a contract to
mutually cancel the original acquisition agreement.




On June
16, 2008, the Company acquired ALG Bio Oils Limited, which in turn owns 100% of
ALG Western Oils (Pty) Ltd. ALG Western Oils has the technology to make bio fuel
from algae and has entered into a Letter of Intent with Xstrata Alloys to begin
a bio fuel project at the Boshoek smelter in South Africa. The pilot plant was
completed during 2009 and is currently in the test phase. This acquisition
continues the Company’s strategy of investing in energy related
enterprises.




On May
26, 2009, the Company acquired 51% of H-Power (Pty) Ltd. H-Power (Pty) Limited,
a South African registered company, which owns an exclusive license to develop
and market batteries based on patented Hybrid Battery Technology worldwide. In
August 2009, the Company and H-Power (Pty) Ltd cancelled the purchase as H-Power
required substantial capital as well as a partner to develop a production line
for the batteries based on its patented Hybrid Battery Technology.





The
Company intends to expand the making of bio fuels from algae to other large
mining companies in South Africa.





The
company will also explore investments in other energy related enterprises. These
future activities will be dependent upon the Company’s ability to raise
additional funds. Currently, the Company does not have sufficient cash to
continue operations for the next twelve months. Our auditors have raised
substantial doubt about the Company’s ability to continue as a going concern.
Although no assurances can be given, management has received verbal assurances
from the related parties referred to above that such funding will continue as
needed. Based on these assurances, management expects that the Company will be
able to develop its interest in ALG Bio Oils Ltd. and execute its plan of
operations and continue as a going concern.





CAPITAL
RESOURCES AND LIQUIDITY




As of
December 31, 2009, the Company had cash of $4,907, not sufficient to fund
operations. Funding has been provided by and is expected to continue to be
provided by Global Investment Group, Inc. and various related parties of ALG Bio
Oils Limited. Should these various parties be unable to continue funding
operations, the Company may not be able to proceed with its business plan. The
Company’s auditors have raised substantial doubt about our ability to continue
as a going concern as sufficient cash is not on hand to continue operations for
the next twelve months and operating losses are expected to continue. However,
management has received verbal assurances from these related parties that such
funding will continue as needed.




10





CRITICAL
ACCOUNTING POLICIES AND CHANGES TO ACCOUNTING POLICIES




The
Company historically has utilized the following critical accounting policies in
making its more significant judgments and estimates used in the preparation of
its financial statements:




Use of Estimates. In preparing
financial statements in conformity with accounting principles generally accepted
in the United States, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reported period. Actual
results could differ from those estimates and the differences could be
material.





Income Taxes. The Company
accounts for income taxes under FASB Accounting Standards Codification No. 740,
Income Taxes.Under FASB ASC No. 740,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under FASB ASC No. 740, the
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment
date.





Impairment.The Company
accounts for any impairment in accordance with FASB Accounting Standards
Codification No. 350,Intangibles - Goodwill and Other. Under FASB ASC No. 350, intangible assets are
reviewed for evidence or changes in circumstances that indicate that their
carrying value may not berecoverable. TheCompany periodically
reviews the carrying value to determine whether or not an impairment to such
value has occurred.





Foreign Currency Translation.The functional currency of the Company is the United States
Dollar.  The financial statements of the Company are translated to
United States dollars using period-end exchange rates as to assets and
liabilities and average exchange rates as to revenues and
expenses.  Capital accounts are translated at their historical
exchange rates when the capital transaction occurred.  Net gains and
losses resulting from foreign exchange translations are included in the
statements of operations and stockholders’ deficit as other comprehensive income
(loss).




There
were no changes in accounting policies during the year.




OFF-BALANCE
SHEET ARRANGEMENTS




The
Company is not a party to any off- balance sheet arrangements.




DESCRIPTION
OF PROPERTY




The
Company does not own any real property or any interest in real property and does
not invest in real property or have any policies with respect thereto as a part
of their operations or otherwise.




Our
principal office facility is presently located in space owned by our president.
Rent has not been charged for the office space, and it is not expected that rent
will be charged in the near-term.




11




ITEM
8. FINANCIAL STATEMENTS.




The
company's financial statements are attached hereto and incorporated herein by
reference.




ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS




None.




ITEM
9A. CONTROLS AND PROCEDURES




CODE
OF ETHICS




The
Company has adopted a Code of Ethics that applies to employees, officers and
directors. The Code of Ethics was filed as Exhibit 14.1 to the Company's Form
10-KSB filed for the year ended December 31, 2004.




DISCLOSURE
CONTROLS AND PROCEDURES




The
Company maintains disclosure controls and procedures designed to ensure
information required to be disclosed in Company reports filed under the
Securities Exchange Act of 1934, as amended (“the Exchange Act”), is recorded,
processed, summarized, and reported within the time periods specified in the
Securities and Exchange Commission’s rules and forms. Disclosure controls and
procedures are designed to provide reasonable assurance that information
required to be disclosed in Company reports filed under the Exchange Act is
accumulated and communicated to management, including the Company’s Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely
decisions regarding required disclosure.




Mr.
Arthur Johnson who is our Chief Executive Officer and Chief Financial Officer,
has evaluated the effectiveness of the Company’s disclosure controls and
procedures pursuant to Rule 13a-15(b) of the Exchange Act as of December 31,
2009. Based on that evaluation, the Company’s Chief Executive Officer and Chief
Financial Officer has concluded that there is a material weakness in our
internal control over financial reporting and that our financial reporting
controls were not effective.  A material weakness is a deficiency, or
a combination of control deficiencies, in internal control over financial
reporting such that there is a reasonable possibility that a material
misstatement of the Company’s annual or interim financial statements will not be
prevented or detected on a timely basis.





The
material weakness identified are:




The
Company issued shares of common stock to various consultants of H-Power (Pty)
Ltd. The Company was deficient in obtaining executed agreements for its files
and in accounting for the various agreements. The Company also does not have
sufficient accounting staff at its ALG Bio Oils Ltd. and H-Power (Pty) Ltd.
subsidiaries in South Africa to ensure that all transactions are properly
reconciled, and timely and properly reflected in the accounting records.
 This insufficiency in accounting staff results in a lack of accounting
expertise necessary for an effective system of internal control.




12






In order
to mitigate the above weaknesses, the Company will consider adding accounting
staff but at a minimum will improve communication to its accounting firm in
South Africa to ensure that all transactions are properly supported and timely
recorded. In addition, management will conduct a more thorough review of all
financial reports issued for completeness  and
reasonableness.





MANAGEMENT’S
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING




The
Company’s management is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rules 13a-15(f) under
the Securities Exchange Act of 1934. Pursuant to the rules and regulations of
the Securities and Exchange Commission, internal control over financial
reporting is a process designed by, or under the supervision of, the Company’s
principal executive and principal financial officers, and effected by the
Company’s board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States. Due to inherent
limitations, internal control over financial reporting may not prevent or detect
misstatements. Further, because of changes in conditions, effectiveness of
internal control over financial reporting may vary over time.




Mr.
Arthur Johnson who is our Chief Executive Officer and Chief Financial Officer,
has evaluated the effectiveness of the Company’s internal control over financial
reporting as of December 31, 2009 based on the control criteria established in a
report entitled Internal Control — Integrated Framework, issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO). Based on such
evaluation management has concluded that our internal control over financial
reporting was not effective as of December 31, 2009 as indicated
above.




Webb
& Company, P.A., the Company’s independent registered public accounting
firm, has not issued an attestation report on the effectiveness of the Company’s
internal controls over financial reporting since we are not yet required to
comply with this provision of Section 404(B) of the Sarbanes-Oxley
Act.




CHANGES
IN INTERNAL CONTROL OVER FINANCIAL REPORTING




There
were no changes in the Company’s internal control over financial reporting
during the Company’s fiscal quarter ending December 31, 2009, that have
materially affected, or are reasonably likely to materially affect, the
Company’s internal control over financial reporting.




PART
III




ITEM
10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OFFICERS
AND DIRECTORS




From
September 30, 2002 through September 23, 2005, Curtis Olschansky, 42, was the
sole officer and director of the Company. Mr. Olschansky served as AST's
President, principal executive officer and interim principal financial
officer.




On
September 23, 2005, James F. Mongiardo, 60, replaced Mr. Olschansky as sole
director and was elected Chief Executive Officer and President of the Company.
Mr. Mongiardo served as a director of the Company from September 23, 2005
through April 21, 2006.




13




Immediately
prior to the exchange of ownership with the original stockholders of
CardioBioMedical Corporation on April 21, 2006, Mr. Mongiardo resigned and
Arthur V. Johnson was appointed to the Board and to serve as President and
Secretary.




Arthur V.
Johnson‘s responsibilities include expansion of the company through
acquisitions. In addition, Mr. Johnson oversees all corporate governance and any
of our reporting requirements. From February 1998 to April 2003, Mr. Johnson was
Managing Director of Century Minerals (Pty) Ltd., a resource commodity trading
house. Mr. Johnson has over 30 years experience in mining and previously served
as a Director with Babcock International Group. Mr. Johnson previously sold his
own chrome business to SA Chrome, a public company. Mr. Johnson graduated from
the University of Cape Town in 1955 with a Degree in Commerce.




Nick
Theunissen has over 15 years experience in strategic planning on a national
level. He founded and owned a chrome mine on the Western Chrome Belt and a
coalmine at Ermelo in South Africa. He co-founded the ferrochrome smelter SA
Chrome & Alloys renamed to Merafe wich is currently owned by Xtrata. Nick
also founded Alumicor an alluminium smelter at Pietermaritzburg which were taken
over by an Australian group. He then founded ALG Western Oil Ltd. which was
purchased by Odyssey Oil & Energy Inc. On August 26th, 2008,
Mr. Theunissen was appointed Vice-President and Director of Odyssey Oil &
Energy Inc.





Summary Compensation Table;
Compensation of Executive Officers





The
following summary compensation table sets forth all compensation awarded to,
earned by, or paid to the named executive officers earned by us during the years
ended December 31, 2009 and 2008 in all capacities for the accounts of our
executives, including the Chief Executive Officer (CEO) and Chief Financial
Officer (CFO):




SUMMARY
COMPENSATION TABLE




Name
      and Principal Position
            
            Year
            
            Salary
              ($)
            
            Bonus
              ($)
            
            Stock
      Awards
              ($)
            
            OptionAwards
              ($)
            
            Non-Equity Incentive Plan
      Compensation ($)
            
            Non-Qualified
      Deferred Compensation Earnings
              ($)
            
            All
      Other Compensation
              ($)
            
            Totals
              ($)Arthur
      Johnson:
              CEO,
      CFO
            
            
            2009
            
            250,000
            
            
            0
            
            400,000
            
            
            0
            
            0
            
            
            0
            
            0
            
            
            650,0002008
            
            0
            
            
            0
            
            0
            
            
            0
            
            0
            
            
            0
            
            0
            
            
            0Nicolaas
      Theunissen:
              VP
            
            
            2009
            
            250,000
            
            
            0
            
            0
            
            
            0
            
            0
            
            
            0
            
            0
            
            
            250,0002008
            
            0
            
            
            0
            
            0
            
            
            0
            
            0
            
            
            0
            
            0
            
            
            0





Mr.
Johnson received five million common shares valued for financial accounting
purposes at $400,000 ($.08 per share) as compensation for prior years’
services.





14




Option Grants
Table.There were
no individual grants of stock options to purchase our common stock made to the
executive officers named in the Summary Compensation Table through December 31,
2009.





Aggregated
Option Exercises and Fiscal Year-End Option Value Table.There were no stock options
exercised during the year ended December 31, 2009 by the executive officers
named in the Summary Compensation Table.





Long-Term Incentive Plan
(“LTIP”) Awards Table.There were no awards made to the named executive officers in the last
completed fiscal year under any LTIP.




Compensation of
Directors





Directors
are permitted to receive fixed fees and other compensation for their services as
directors. The Board of Directors has the authority to fix the compensation of
directors. No amounts have been paid to, or accrued to, directors in such
capacity.





Employment
Agreements





As of
December 31, 2009, we do not have employment agreements in place with our
officers and directors.




AUDIT
COMMITTEE




The
Company currently does not have an audit committee; Arthur Johnson has acted and
will continue to act as the audit committee of the Board of
Directors.




NOMINATIONS




The Board
of Directors nominates candidates to stand for election as directors; other
candidates also may be nominated by any stockholder, provided that such other
nomination(s) are submitted in writing to the Secretary of the Company no later
than 90 days prior to the meeting of stockholders at which such directors are to
be elected, together with the identity of the nominator and the number of shares
of the Company's stock owned, directly or indirectly, by the nominator.
Directors are elected at the annual meeting of the stockholders, except for
vacancies and newly created directorships resulting from any increase in the
authorized number of directors elected by all of the stockholders having the
right to vote as a single class (which positions may be filled by the
affirmative vote of a majority of the directors then in office, although fewer
than a quorum, or by a sole remaining director), and each director elected shall
hold office until such director's successor is elected and qualified or until
the director's earlier death, resignation or removal. These procedures have not
changed since adopted by the Company.




15




ITEM
11. EXECUTIVE COMPENSATION




Mr.
Johnson received five million common shares valued for financial accounting
purposes at $400,000 ($.08 per share) as compensation for prior years’ services.
In addition, officer compensation totaling $500,000 was accrued for the current
year to Arthur Johnson and Nicolaas Theunissen.




OPTION
AND LONG-TERM INCENTIVE PLANS




The
Company has not maintained and currently does not maintain any option or similar
equity compensation plans or programs, or any long-term incentive programs or
plans, and no current or former officer has ever been granted any stock options
or stock appreciation or similar rights.




DIRECTOR
COMPENSATION




The
Company does not have arrangements, standard or otherwise, pursuant to which
directors are compensated for services provided as directors (including as
members of committees of the Board of Directors). The directors of the Company
have not been and currently are not compensated for their services as
directors.




EMPLOYMENT
AND RELATED AGREEMENTS




The
Company was not a party to any employment or other related
agreements.




ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT




The
following table shows, as of December 31, 2009, the beneficial ownership of
Common Stock of the Company by (i) any person or group who is known to the
Company to be the beneficial owner of more than 5% of the Company's Common
Stock, (ii) the sole current director of the Company, (iii) the sole named
executive officer of the Company, and (iv) all current directors and executive
officers as a group.




Name and
Address of Amount and Nature of   Beneficial Owner
Beneficial Ownership (1) Percent of class




16




Name
      and Address of
              Beneficial
      Owners
            
            Amount
      and Nature of
              Beneficial Owner(1)
            
            
            Percent
      of
              ClassBio
      Oils Trust
              17
      GR, Xenopoulou Street
              limosol,
      Cyprus 3106
            
            
            97,150,000
            
            
            
            33.1
            %Daros
      Limited
              P.O.Box
      363
              Rivonia,
      2128
              South
      Africa
            
            
            17,820,000
            
            
            
            6.1%Arthur
      Johnson
              18
      George Ave
              Rivonia
      2128
              South
      Africa
            
            
            5,000,000
            
            
            
            1.7%Interco
      Holdings Ltd
              CTV
      House, La Pouquelaye
              St.
      Helier, Jersey JE2 3GF
            
            
            15,000,000
            
            
            
            5.1
            %All
      current directors and executive officers as a group
            
            
            5,000,000
            
            
            
            1.70
            %









(1)
              Unless
      otherwise indicated, each of the persons named in the table above has sole
      voting and investment power with respect to the shares set forth opposite
      such person's name. With respect to each person or group, percentages are
      calculated based on the number of shares beneficially owned, including
      shares that may be acquired by such person or group within 60 days of
      December 31, 2009 upon the exercise of stock options, warrants or other
      purchase rights, but not the exercise of options, warrants or other rights
      held by any other person.
  The
Company knows of no arrangement that may result in a change of
control.




ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS




During
the year ended December 31, 2009, the Company issued five million shares of
common stock to its President as compensation for prior years’ services with a
fair value $400,000.




During
the years ended December 31, 2009 and 2008, a related party advanced an
additional $62,584 and $62,728, respectively, in payment of operating and
development expenses. In addition, principal repayments of $15,326 were made.
These advances are unsecured, bear interest at 10% per annum and are due on
demand.




During
the year ended December 31, 2009 and 2008, a related party advanced to ALG Bio
Oils Ltd, the Company’s wholly owned subsidiary, $37,984 and $4,314,
respectively, in payment of operating expenses. The loans are non-interest
bearing and are due at the discretion of the director.




During
2005, 2006, 2007, 2008, and 2009 the Company recorded additional paid-in capital
of $12,000 for the fair value of rent and services contributed to the Company by
its president.




On April
21, 2006, the Company issued 60 million shares of common stock to purchase a 10%
working interest in certain gas and oil leases in Texas for $165,000 ($.003 per
share) from Centurion Gold Holdings, Inc., a related public
company.




During
2003, the Company issued 21,375,000 shares of common stock to its President for
services with a fair value of $712,500.




17




During
2003, an officer advanced the Company $15,413 for start-up and operating
expenses. The advance is non-interest bearing, unsecured and due on
demand.




During
2005, 2004 and 2003, the Company recorded royalty expenses due to a related
party of $150,000, $187,813 and $15,625, respectively.




During
2005, a stockholder loaned the Company $49,656 for working capital. The loan
bears interest at 10%, is unsecured and due on demand.




During
2005, the Company issued 15,000,000 shares of common stock to its Chief
Executive Officer and President in recognition and consideration of his service
as an officer and director of the Company since June 2003 and his contributions
to the progress and development of the Company. For financial accounting
purposes, these shares were valued at $150,000 ($0.03 per share) based upon
recent market prices of the Company.




During
2005, the Company settled a dispute with a related party. The settlement
agreement called for the related party to return 49,500,000 shares of common
stock to the company and the company to give back the exclusive rights to the
patent. The shares were valued on the date of settlement and the company
recorded a loss on the settlement of $1,065,729.




In
January 2003, the Company entered into a licensing agreement with Exerciting,
LLC to acquire the exclusive rights associated with a product known as Better
Buns. The terms of the licensing agreement provided that the Company would pay
Exerciting a royalty of eight percent (8%) of gross revenues derived from the
Company's sales of the product and that the Company must achieve certain minimum
sales figures on an annual basis or pay minimum royalty payments of fifty
thousand dollars ($50,000) per quarter regardless of sales achieved, and issue
100,000 shares of its common stock to the members of the licensor. Curtis
Olschansky, the Company's former principal executive officer and director, is
the brother of Brad Olschansky and Scott Olschansky, who are the owners and
members of Exerciting, LLC. The Company issued 200,000 shares (after giving
effect to the stock split discussed below) to these individuals in January 2003.
This agreement was terminated during May 2005.




During
October 2003, the Company received non-interest bearing, unsecured, demand
working capital loans in the amount of $5,000 from Mr. Olschansky, its former
principal executive officer and director, and $5,000 from Meredith Dodrill, a
significant stockholder. These loans were forgiven in full in connection with
the Merger. During May 2005, the Company received a non-interest bearing,
unsecured, demand working capital loan of $5,750 from Mr. Olschansky, its former
principal executive officer and director. This loan was forgiven in full in
connection with the Merger. Meredith Dodrill, a significant stockholder of the
Company, is married to James Dodrill, who served as corporate legal counsel for
the Company. Mr. Dodrill also acted as interim President of the Company upon its
inception. As of July 31, 2004, Mr. Dodrill was owed $50,000 for legal services
provided to the Company, which amount was forgiven in full in connection with
the Merger.




Because
of their initiatives in founding and organizing the Company, Mr. and Mrs.
Dodrill may both be considered promoters of the Company. Mrs. Dodrill is
presently the holder of 3,000,000 shares of our common stock, which were issued
in exchange for the forgiveness of expenses payable to Ms. Dodrill totaling
$10,000.




18




ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES




(A)
Audit Fees





The
aggregate fees billed for professional services rendered for the audit of annual
financial statements included in Form 10-K for the fiscal year ended December
31, 2009 and for the review of quarterly financial statements included in Form
10-Q for the quarters ended March 31, June 30 and September 30, 2009 were
$22,804





The
aggregate audit fees billed for professional services rendered for the audit of
annual financial statements included in Form 10-K for the fiscal year ended
December 31, 2008 and for the review of quarterly financial statements included
in Form 10-Q for the quarters ended March 31, June 30 and September 30, 2008
were $9,112.





(B)
Audit-Related Fees





None.





(C) Tax
Fees





None





(D) All
Other Fees





None.




(E)  Audit
Committee Approval




We
currently do not have an audit committee. Arthur Johnson, our president has
acted and will continue to act as the audit committee of the Board of
Directors.  All services performed by our auditor have been
pre-approved.




DESCRIPTION
OF SECURITIES




The only
securities of the Company currently outstanding are shares of its common stock,
$.0001 par value. The Company is authorized to issue 650,000,000 shares of its
common stock and 20,000,000 million shares of preferred stock, $.0001 par value,
although no classes or series of preferred stock have been designated. The Board
of Directors of the Company is authorized by the Company's Amended and Restated
Articles of Incorporation to fix the number and designations, powers,
preferences, rights and restrictions of any such class or series of preferred
stock.




Holders
of the Company's common stock are entitled to one vote per share on each matter
submitted to a vote at a meeting of shareholders. Except as otherwise expressly
provided by the law of the State of Florida or the Company's Amended and
Restated Articles of Incorporation or the resolution of the Board providing for
the issue of a series of preferred stock, the holders of the common stock shall
possess exclusive voting power for the election of directors and for all other
purposes.




Subject
to any prior rights to receive dividends to which the holders of shares of any
series of preferred stock may be entitled, the holders of shares of common stock
shall be entitled to receive dividends if and when declared payable from time to
time by the Board of Directors from funds legally available for payment of
dividends.




19




In the
event of any dissolution, liquidation or winding up of the Company, whether
voluntary or involuntary, after there shall have been paid to the holders of
shares of preferred stock the full amounts to which they may be entitled, the
holders of the then-outstanding shares of common stock shall be entitled to
receive, pro rata, any remaining assets of the Company available for
distribution to shareholders. The Board of Directors may distribute in kind to
the holders of common stock such remaining assets of the Company or may sell,
transfer or otherwise dispose of all or any part of such remaining assets to any
other corporation, trust or entity and receive payment in cash, stock or
obligations of such other corporation, trust or entity or any combination
thereof, and may sell all or any part of the consideration so received, and may
distribute the consideration so received or any balance or proceeds of it to
holders of common stock. The voluntary sale, conveyance, lease, exchange or
transfer of all or substantially all the property or assets of the Company
(unless in connection with that event the dissolution, liquidation or winding up
of the Company is specifically approved), or the merger or consolidation of the
Company into or with any other corporation, or the merger of any other
corporation into it, or any purchase or redemption of shares of stock of the
Company of any class, is not deemed to be a dissolution, liquidation or winding
up of this Corporation for the purposes of the foregoing.




Pursuant
to the Company's Amended and Restated Articles of Incorporation, no holder of
any shares of the Company of any class now or in the future authorized has any
preemptive right (other than such right, if any, as the Board of Directors in
its discretion may determine) to purchase or subscribe for any additional issues
of shares of the Company of any class now or in the future authorized, any
shares of the Company purchased and held as treasury shares, any part paid
receipts or allotment certificates in respect of any such shares, any securities
convertible into or exchangeable for any such shares, or any warrants or other
instruments evidencing rights or options to subscribe for, purchase or otherwise
acquire any such shares, whether such shares, receipts, certificates,
securities, warrants or other instruments be unissued, or issued and
subsequently acquired by the Company. Any such shares, receipts, certificates,
securities, warrants or other instruments, in the discretion of the Board, may
be offered from time to time to any holder or holders of shares of any class or
classes to the exclusion of all other holders of shares of the same or any other
class at the time outstanding.




Market
Price of and Dividends on the Registrant's Common Equity and Other Shareholder
Matters




The
Company's common stock was approved for unpriced quotation on the
Over-the-Counter Bulletin Board on October 19, 2004. It trades under the symbol
OOGI.OB. High and low bid information for the Company's common stock is not
currently available.




As of
December 31, 2009, there were 128 shareholders of record of our common stock and
a total of 228,566,500 shares outstanding.




We have
never paid any dividends and do not currently anticipate paying dividends in the
future. Any payment of cash dividends in the future will be dependent upon the
amount of funds legally available, our earnings, financial condition, capital
requirements and other factors that our Board of Directors deems
relevant.




There are
currently no outstanding options or warrants to purchase, or any securities that
are convertible into, our common stock. The single warrant to purchase 6,500,000
shares issued in connection with the CBM Merger was cancelled upon exchange of
ownership in CBM with the original stockholders.




The
Company does not maintain any option or similar equity compensation plans or
programs.




20




LEGAL
PROCEEDINGS




The
Company is not a party to any pending legal proceeding.




INDEMNIFICATION
OF OFFICERS AND DIRECTORS




Section
11.3 of the Company's Amended and Restated Articles of Incorporation provides
that the Company must indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Company), by reason of the fact
that he/she is or was a director, officer, employee or agent of the Company, or
is or was serving at the request of the Company as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him/her in
connection with such action, suit or proceeding. Such indemnification is
predicated on the individual having acted in good faith and in a manner he/she
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his/her conduct was unlawful.




In
addition, the Amended and Restated Articles of Incorporation provide that the
Company shall indemnify any person who was or is a party or is threatened to be
made a party to any threatened pending or completed action or suit by or in the
right of the Company to procure a judgment in its favor by reason of the fact
that he/she is or was a director, officer, employee or agent of the Company, or
is or was serving at the request of the Company as a director, officer,
employee, or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees) actually and
reasonably incurred by him/her in connection with the defense or settlement of
such action or suit. Such indemnification is predicated on the individual having
acted in good faith and in a manner he/she reasonably believed to be in or not
opposed to the best interests of the Company and except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable for negligence or misconduct in the
performance of his/her duty to the Company unless and only to the extent that
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper.




To the
extent that a person has been successful on the merits or otherwise in defense
of any action, suit or proceeding or in defense of any claim, issue or matter
therein, he/she shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him/her in connection
therewith.




UNREGISTERED
SALES OF EQUITY SECURITIES




In
connection with the Merger discussed above, the Board of Directors of the
Company authorized the issuance of up to 22,077,509 shares of its common stock,
$0.0001 par value (representing 66.5% of the Company's issued and outstanding
shares following the Merger), to the stockholders of CBM. Such shares will be
exchanged, on a one-for- one basis, for up to 22,077,509 issued and outstanding
shares of common stock, $.01 par value, held by CBM's consenting shareholders.
The issuance of stock to U.S. stockholders was made in reliance on the exemption
from the registration requirements of the Securities Act of 1933, as amended,
pursuant to Section 4(2) thereof and to foreign stockholders pursuant to
Regulation S promulgated thereunder. Immediately after the closing of the
Merger, the Company had 33,175,009 shares of its common stock outstanding
assuming conversion of all CardioBioMedical Corporation common shares into
registrant's common stock. Pursuant to the terms of the Agreement, the Company
also issued a warrant to purchase 6,500,000 shares of its common stock to a
warrant holder of CBM in exchange for a CBM warrant representing such holder's
right to purchase 6,500,000 shares of CBM common stock. The warrant is not
exercisable until January 1, 2008 and will expire on December 31, 2014. The
exercise price is $.01 per share and the warrant is not assignable or
transferable by the holder.




21




On April
21, 2006, our Board of Directors authorized the purchase (the "Purchase") of a
ten percent (10%) working interest in an oil exploration project in the BBB
Area, Wharton, Texas from Centurion Gold Holdings, Inc., a related public
company. Presently, the business operations of BBB Area constitute all of the
business operations of the Company. As a result of the Purchase, the Company
disposed of CBM and returned to treasury 22,077,509 shares of the issued and
outstanding common stock and canceled the warrant to purchase 6,500,000 shares
of the Company's common stock at a purchase price of $.01 per
share.




On
November 21, 2007 our Board of Directors authorized the purchase (the
“Purchase”) of one hundred percent of a Uranium Prospect known as Springbok
Flats in the Bela Bela District, South Africa. The rights were being held
through the company MCA Uranium One (Pty) Ltd a wholly owned subsidiary of
Odyssey Oil & Energy, Inc. As a result of the purchase, the Company issued
15,000,000 shares of the Company’s common stock at a purchase price of $.28 per
share.




On June
16, 2008, the Company acquired ALG Bio Oils Limited, which in turn owns 100% of
ALG Western Oils (Pty) Ltd. ALG Western Oils. As a result of the Purchase the
Company issued 35,000,000 shares of the Company’s common stock at a purchase
price of $.62 per share. On June 22, 2009 the Company issued a further
75,000,000 shares of the Company’s common stock at a purchase price of $.20 per
share, on commissioning the pilot plant at Boshoek.




On May 5,
2009, the Company issued an additional 75 million shares at a purchase price of
$0.20 per share in connection with the acquisition of ALG Bio Oils
Ltd.





On May
26, 2009, the Company acquired 51% of H-Power (Pty) Ltd. H-Power (Pty) Limited.
As
a result of the purchase, the Company issued 35,000,000 shares of the Company’s
common stock at a purchase price of $.58 per share. In August, 2009, the Company
officially cancelled the purchase of the 51% of H-Power (Pty) Ltd. As a result
of the cancellation the Company, 65,000,000 shares of the Company’s common stock
was returned to Treasury.





During
the year ended December 31, 2009, the Company issued 1,356,500 shares of common
stock for consulting services relating to its ALG Bio Oils Ltd. subsidiary at a
purchase price of $.58 per share.





During
the year ended December 31, 2009, the Company issued 2,200,000 shares of common
stock for consulting services relating to former subsidiary H-Power (Pty) Ltd.
at a purchase price of $.27 per share.





During
the year ended December 31, 2009, the Company issued 5 million shares of common
stock to an officer at a purchase price of $.08 per share.





During
the year ended December 31, 2009, the Company issued 1,267,500 shares of common
stock for cash at a purchase price of $0.12 per share.




22





CHANGES
IN CONTROL OF REGISTRANT




Upon the
closing of the Merger described above on September 23, 2005, two former
stockholders of CBM, James F. Mongiardo and Charles Minutolo, who together owned
95.7% of the issued and outstanding shares of common stock of CBM, became the
controlling stockholders of the Company as a result of their ownership of
approximately 63.7% of the outstanding shares of common stock the Company
following the Merger. The previous controlling stockholders of the Company were
Curtis Olschansky (7,000,000 shares or approximately 63%) and Meredith Dodrill
(3,000,000 shares or approximately 27%). Messrs. Mongiardo and Minutolo obtained
such control through the exchange by them of an aggregate 21,127,500 shares of
CBM common stock for an equal number of shares of common stock of AST issued in
connection with the Merger.




On April
21, 2006, with the purchase referred to above, the Company disposed of CBM and
returned to treasury 22,077,509 shares of the issued and outstanding common. As
a result of the Purchase, Centurion Gold Holdings, Inc. became the controlling
stockholder of the Company as a result of their ownership of approximately 64.3%
(0% as of December 31, 2009) of the outstanding shares of common
stock.




On June
16, 2008, with the purchase of ALG Western Oils (Pty) Ltd, and the additional
issuance of 75 million common shares, Bio Oils Trust became the controlling
shareholder of the Company as a result of their ownership of approximately 42.5%
(20.9% as of December 31, 2008) of the outstanding shares of common
stock.




There are
no other arrangements known to the Company, the operation of which may at a
subsequent date result in a change of control of the Company or which relate to
the election of directors or other matters.




The Board
of Directors of the Company consisted of Arthur Johnson, Nicolaas Theunissen and
Luan Theunissen.




Departure
of Directors or Principal Officers; Election of Directors; Appointment of
Principal Officers




On
September 23, 2005 in connection with the Merger described above, the AST Board
of Directors accepted the resignation of Curtis Olschansky as President,
principal executive officer, principal financial officer and director of the
Company and elected James F. Mongiardo to fill the vacancy on the Board. Mr.
Mongiardo was also elected to serve as Chief Executive Officer and President of
the Company.




Immediately
prior to the exchange of ownership with the original stockholders of
CardioBioMedical Corporation on April 21, 2006, Mr. Mongiardo resigned and
Arthur V. Johnson was appointed to the Board and to serve as President and
Secretary. The size of the Company’s Board was fixed at one until changed in
accordance with applicable law and the Company's Amended and Restated Articles
of Incorporation and Bylaws.




Arthur V.
Johnson‘s responsibilities include expansion of the company through
acquisitions. In addition, Mr. Johnson oversees all corporate governance and any
of our reporting requirements. From February 1998 to April 2003, Mr. Johnson was
Managing Director of Century Minerals (Pty) Ltd., a resource commodity trading
house. Mr. Johnson has over 30 years experience in mining and previously served
as a Director with Babcock International Group. Mr. Johnson previously sold his
own chrome business to SA Chrome, a public company. Mr. Johnson graduated from
the University of Cape Town in 1955 with a Degree in Commerce.




23




Mr.
Johnson serves as a director of Centurion Gold Holdings, Inc.  a
reporting company.  There are no family relationships among the
current director or executive officer (or nominees therefor) of Odyssey. Mr.
Johnson is not currently a party to an employment agreement with the Company and
has not been a party to any transaction with Odyssey. For more information on
related party transactions, see "Certain Relationships and Related Transactions"
herein.




On August
26, 2008, Nicolaas  Theunissen was appointed  to the Board
and to serve as Chairman.




ODYSSEY
      OIL AND ENERGY, INC.
                (Registrant)Dated:
      April 14, 2010By:
              /s/ Arthur JohnsonArthur
      JohnsonPrincipal
      Executive Officer,President,
      and Chief Financial Officer





24


ODYSSEY
OIL & ENERGY, INC.  & SUBSIDIARIES
 (F/K/A
ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
 (A
DEVELOPMENT STAGE COMPANY)
 CONSOLIDATED
FINANCIAL STATEMENTS
 AS OF DECEMBER 31,
2009
 
 
 
  ODYSSEY
OIL & ENERGY, INC.  & SUBSIDIARIES
 (F/K/A
ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
 (A
DEVELOPMENT STAGE COMPANY)
  CONTENTS
 
 PAGE
              1
              REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMPAGE
              2
              CONSOLIDATED
      BALANCE SHEETS AS OF DECEMBER 31, 2009 AND 2008PAGE
              3
              CONSOLIDATED
      STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE YEARS ENDED
      DECEMBER 31, 2009 AND 2008 AND FOR THE PERIOD FROM MAY 28, 2003
      (INCEPTION) TO DECEMBER 31, 2009PAGES
              4 –
      6
              CONSOLIDATED
      STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) FOR THE PERIOD FROM
      MAY 28, 2003 (INCEPTION) TO DECEMBER 31, 2009PAGES
              7
              CONSOLIDATED
      STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
      AND FOR THE PERIOD FROM MAY 28, 2003 (INCEPTION) TO DECEMBER 31,
      2009PAGES
              9 -
      23
              NOTES
      TO CONSOLIDATED FINANCIAL
STATEMENTS
 
 
  REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Board of Directors of:
 Odyssey
Oil & Energy, Inc.(F/K/A Odyssey Oil and Gas, Inc.)
 (A
Development Stage Company)
 
 We have
audited the accompanying consolidated balance sheets of Odyssey Oil &
Energy, Inc. (F/K/A
Odyssey Oil & Gas, Inc.) and Subsidiaries (the “Company”) (a development
stage company) as of December 31, 2009 and 2008, and the related statements of
operations and comprehensive loss, changes in stockholders’ equity (deficit),
and cash flows for the years ended December 31, 2009 and 2008 and for the period
from May 28, 2003 (inception) to December 31, 2009.  These financial
statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, the consolidated financial statements referred to above present fairly
in all material respects, the consolidated financial position of Odyssey Oil
& Energy, Inc. and Subsidiaries (a development stage company) as of December
31, 2009 and 2008 and the results of its operations and its cash flows for the
years ended December 31, 2009 and 2008 and for the period from May 28, 2003
(inception) to December 31, 2009, in conformity with accounting principles
generally accepted in the United States of America.
 
 The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 10 to the
consolidated financial statements, the Company is in the development stage
with an accumulated deficit of $66,750,595, a working capital deficiency of
$248,376 and stockholders’ deficit of $247,376 as of December 31, 2009, and net
cash used in continuing operations of $243,349 since inception. These factors
raise substantial doubt about the Company's ability to continue as a going
concern.  Management's plans concerning these matters are also
described in Note 10. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
 
 WEBB
& COMPANY, P.A.
 Certified
Public Accountants
 
 Boynton
Beach, Florida
 April 14,
2010
  1
  ODYSSEY OIL & ENERGY, INC. & SUBSIDIARIES (F/K/A ODYSSEY OIL & GAS, INC. & SUBSIDIARIES) (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED BALANCE
SHEETS
 As
      of December 31,2009
                  
                  
                  2008ASSETSCURRENT
      ASSETSCash
                  
                  $
                  4,907
                  
                  
                  $
                  1,196Loan
      Receivable
                  
                  
                  729,589
                  
                  
                  
                  -Total Current
      Assets
                  
                  
                  734,496
                  
                  
                  
                  1,196Property
      & Equipment, net
                  
                  
                  1,000
                  
                  
                  
                  1,000TOTAL
      ASSETS
                  
                  $
                  735,496
                  
                  
                  $
                  2,196LIABILITIES
      AND STOCKHOLDERS' DEFICITCURRENT
      LIABILITIESAccounts
      payable and accrued expenses
                  
                  $
                  557,842
                  
                  
                  $
                  77,060Loans
      payable and accrued interest - related parties
                  
                  
                  425,030
                  
                  
                  
                  312,209Liabilities
      held for sale - discontinued operations
                  
                  
                  -
                  
                  
                  
                  253,434Total
      Liabilities
                  
                  
                  982,872
                  
                  
                  
                  642,703COMMITMENTS
      & CONTINGENCIES
                  
                  
                  -
                  
                  
                  
                  -NON-CONTROLLING
      INTEREST
                  
                  
                  -
                  
                  
                  
                  (316,864
                  )STOCKHOLDERS'
      DEFICITPreferred
      stock, $.0001 par value, 20,000,000 shares authorized,none
      issued and outstanding
                  
                  
                  -
                  
                  
                  
                  -Common
      stock, $.0001 par value, 650,000,000 shares authorized,228,566,500
      and 143,742,500 shares issued and outstanding,
respectively
                  
                  
                  22,857
                  
                  
                  
                  14,375Additional
      paid-in capital
                  
                  
                  66,473,078
                  
                  
                  
                  26,786,251Accumulated
      deficit during development stage
                  
                  
                  (66,750,595
                  )
                  
                  
                  (27,127,703
                  )Accumulated
      other comprehensive income
                  
                  
                  7,284
                  
                  
                  
                  3,434Total Stockholders'
      Deficit
                  
                  
                  (247,376
                  )
                  
                  
                  (323,643
                  )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIT
                  
                  $
                  735,496
                  
                  
                  $
                  2,196
 
 See
accompanying notes to consolidated financial statements.
  2
  ODYSSEY
OIL & ENERGY, INC. & SUBSIDIARIES
 (F/K/A ODYSSEY OIL & GAS, INC. &
SUBSIDIARIES)
 (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS
  For
      the Period from
                        May
      28,2003For
      the Year Ended December 31,
                      
                      
                      (Inception)
                        to
      December2009
                      
                      
                      2008
                      
                      
                      31,
      2009REVENUE
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      26,695OPERATING
      EXPENSESDrilling
      costs and expenses
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      51,886General
      and administrative
                      
                      
                      1,759,071
                      
                      
                      
                      36,062
                      
                      
                      
                      1,848,705Professional
      fees
                      
                      
                      22,353
                      
                      
                      
                      31,174
                      
                      
                      
                      158,515Amortization
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      33,400Impairment
      of investment in oil and gas leases
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      247,931Impairment
      of bio-fuels plant development contract
                      
                      
                      15,000,000
                      
                      
                      
                      21,717,235
                      
                      
                      
                      36,717,235Total
      Operating Expenses
                      
                      
                      16,781,424
                      
                      
                      
                      21,784,471
                      
                      
                      
                      39,057,672LOSS
      FROM CONTINUING OPERATIONS
                      
                      
                      (16,781,424
                      )
                      
                      
                      (21,784,471
                      )
                      
                      
                      (39,030,977
                      )OTHER
      INCOME (EXPENSE)Interest
      income
                      
                      
                      1
                      
                      
                      
                      4
                      
                      
                      
                      2,794Interest
      expense
                      
                      
                      (27,933
                      )
                      
                      
                      (22,140
                      )
                      
                      
                      (73,270
                      )Total
      Other Income (Expense)
                      
                      
                      (27,932
                      )
                      
                      
                      (22,136
                      )
                      
                      
                      (70,476
                      )LOSS
      FROM CONTINUING OPERATIONS BEFOREINCOME
      TAXES
                      
                      
                      (16,809,356
                      )
                      
                      
                      (21,806,607
                      )
                      
                      
                      (39,101,453
                      )Provision
      for Income Taxes
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -LOSS
      FROM CONTINUING OPERATIONS
                      
                      
                      (16,809,356
                      )
                      
                      
                      (21,806,607
                      )
                      
                      
                      (39,101,453
                      )GAIN
      ON DISPOSAL OF SUBSIDIARIES
                      
                      
                      745,118
                      
                      
                      
                      -
                      
                      
                      
                      745,118LOSS
      FROM DISCONTINUED OPERATIONS
                      
                      
                      (23,558,654
                      )
                      
                      
                      (304,437
                      )
                      
                      
                      (32,139,852
                      )NET
      LOSS
                      
                      
                      (39,622,892
                      )
                      
                      
                      (22,111,044
                      )
                      
                      
                      (70,496,187
                      )OTHER
      COMPREHENSIVE INCOMEForeign
      currency translation gain (loss)
                      
                      
                      3,850
                      
                      
                      
                      3,434
                      
                      
                      
                      7,284COMPREHENSIVE
      LOSS
                      
                      $
                      (39,619,042
                      )
                      
                      $
                      (22,107,610
                      )
                      
                      $
                      (70,488,903
                      )LOSS
      PER COMMON SHARE - BASIC AND DILUTEDContinuing
      operations
                      
                      $
                      (0.08
                      )
                      
                      $
                      (0.17
                      )Discontinued
      operations
                      
                      
                      (0.11
                      )
                      
                      
                      (0.00
                      )Total
      Basic and Diluted Loss Per Common Share
                      
                      $
                      (0.19
                      )
                      
                      $
                      (0.17
                      )Weighted
      average number of shares outstanding during the year -Basic
      and Diluted
                      
                      
                      213,494,725
                      
                      
                      
                      127,590,860
 See
accompanying notes to consolidated financial statements.
  3
  ODYSSEY OIL & ENERGY, INC. & SUBSIDIARIES
 (F/K/A ODYSSEY OIL & GAS, INC. & SUBSIDIARIES) (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) FOR THE PERIOD FROM MAY 28,
2003 (INCEPTION) TO DECEMBER 31, 2009
  Accumulated
      Deficit
                          
                          
                          AccumulatedAdditional
                          
                          
                          During
                          
                          
                          Other
                          
                          
                          DeferredPreferred
      Stock
                          
                          
                          Common
      Stock
                          
                          
                          Paid-In
                          
                          
                          Development
                          
                          
                          Comprehensive
                          
                          
                          StockShares
                          
                          
                          Amount
                          
                          
                          Shares
                          
                          
                          Amount
                          
                          
                          Capital
                          
                          
                          Stage
                          
                          
                          Income
                          
                          
                          Compensation
                          
                          
                          TotalCommon
      stock issued to founders for cash ($.03per
      share)
                          
                          
                          -
                          
                          
                          $
                          -
                          
                          
                          
                          7,500
                          
                          
                          $
                          1
                          
                          
                          $
                          249
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          250Common
      stock issued for license ($.03 per share
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          49,500,000
                          
                          
                          
                          4,950
                          
                          
                          
                          1,645,050
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          1,650,000Common
      stock issued to officer as compensation($.03 per
      share)
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          21,375,000
                          
                          
                          
                          2,138
                          
                          
                          
                          710,362
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          712,500Common
      stock issued for cash ($.03 per share)
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          2,400,000
                          
                          
                          
                          240
                          
                          
                          
                          79,760
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          80,000Common
      stock issued for cash ($.15 per share)
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          833,334
                          
                          
                          
                          83
                          
                          
                          
                          124,917
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          125,000Common
      stock issued to consultant for services($.03 per
      share)
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          24,600,000
                          
                          
                          
                          2,460
                          
                          
                          
                          817,540
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          820,000Net
      loss for the period from May 28, 2003 (inception)to December 31,
      2003
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (1,737,805
                          )
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (1,737,805
                          )Balance,
      December 31, 2003
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          98,715,834
                          
                          
                          
                          9,872
                          
                          
                          
                          3,377,878
                          
                          
                          
                          (1,737,805
                          )
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          1,649,945Common
      stock issued for cash ($.15 per share)
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          2,016,693
                          
                          
                          
                          202
                          
                          
                          
                          302,301
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          302,503Net
      loss, 2004
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (551,203
                          )
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (551,203
                          )Balance,
      December 31, 2004
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          100,732,527
                          
                          
                          
                          10,074
                          
                          
                          
                          3,680,179
                          
                          
                          
                          (2,289,008
                          )
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          1,401,245Common
      stock issued in reverse merger
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          33,292,500
                          
                          
                          
                          3,329
                          
                          
                          
                          (3,329
                          )
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -Common
      stock issued to CEO & President for services($.01 per
      share)
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          15,000,000
                          
                          
                          
                          1,500
                          
                          
                          
                          148,500
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          150,000Common
      stock cancelled related to license rights($.01 per
      share)
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (49,500,000
                          )
                          
                          
                          (4,950
                          )
                          
                          
                          (490,050
                          )
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (495,000
                          )In-kind
      contribution
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          12,000
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          12,000Warrants
      issued for non-exclusive license
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          143,238
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          143,238Net
      loss, 2005
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (1,696,989
                          )
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (1,696,989
                          )Balance,
      December 31, 2005
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          99,525,027
                          
                          
                          
                          9,953
                          
                          
                          
                          3,490,538
                          
                          
                          
                          (3,985,997
                          )
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (485,506
                          )
  See accompanying
notes to consolidated financial statements.
  4
 
 ODYSSEY
OIL & ENERGY, INC. & SUBSIDIARIES
 (F/K/A
ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
 (A
DEVELOPMENT STAGE COMPANY)
 CONSOLIDATED
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
 FOR THE PERIOD FROM MAY 28,
2003 (INCEPTION) TO DECEMBER 31, 2009 (CONTINUED)
  Accumulated
                
                
                AccumulatedAdditional
                
                
                Deficit
      During
                
                
                Other
                
                
                DeferredPreferred
      Stock
                
                
                Common
      Stock
                
                
                Paid-In
                
                
                Development
                
                
                Comprehensive
                
                
                StockShares
                
                
                Amount
                
                
                Shares
                
                
                Amount
                
                
                Capital
                
                
                Stage
                
                
                Income
                
                
                Compensation
                
                
                TotalIn-kind
      contribution
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                12,000
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                12,000Common
      stock cancelled in connection withexchange of ownership inCardioBioMedicalCorporation to its
      original stockholders
                
                
                -
                
                
                
                -
                
                
                
                (66,232,527
                )
                
                
                (6,623
                )
                
                
                (3,211,742
                )
                
                
                3,745,592
                
                
                
                -
                
                
                
                -
                
                
                
                527,227Common
      stock issued to purchase investmentin oil and gas leases($.003
      per share)
                
                
                -
                
                
                
                -
                
                
                
                60,000,000
                
                
                
                6,000
                
                
                
                159,000
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                165,000Net
      loss, 2006
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (140,836
                )
                
                
                -
                
                
                
                -
                
                
                
                (140,836
                )Balance,
      December 31, 2006
                
                
                -
                
                
                
                -
                
                
                
                93,292,500
                
                
                
                9,330
                
                
                
                449,796
                
                
                
                (381,241
                )
                
                
                -
                
                
                
                -
                
                
                
                77,885In-kind
      contribution
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                12,000
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                12,000Common
      shares issued to acquire 100% ofoutstanding common
      shares of UraniumAcquisition Corp.,
      Inc.
                
                
                -
                
                
                
                -
                
                
                
                15,000,000
                
                
                
                1,500
                
                
                
                4,248,500
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                4,250,000Net
      loss, 2007
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (4,635,418
                )
                
                
                -
                
                
                
                -
                
                
                
                (4,635,418
                )Balance,
      December 31, 2007
                
                
                -
                
                
                
                -
                
                
                
                108,292,500
                
                
                
                10,830
                
                
                
                4,710,296
                
                
                
                (5,016,659
                )
                
                
                -
                
                
                
                -
                
                
                
                (295,533
                )In-kind
      contribution
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                12,000
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                12,000Common
      stock issued
      to consultant for services($.82 per
      share)
                
                
                -
                
                
                
                -
                
                
                
                450,000
                
                
                
                45
                
                
                
                367,455
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                367,500Common
      shares issued
      to acquire 100% ofoutstanding common
      shares of ALG Bio Oils Ltd.
                
                
                -
                
                
                
                -
                
                
                
                35,000,000
                
                
                
                3,500
                
                
                
                21,696,500
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                21,700,000Other
      comprehensive income
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                3,434
                
                
                
                -
                
                
                
                3,434Net
      loss, 2008
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (22,111,044
                )
                
                
                -
                
                
                
                -
                
                
                
                (22,111,044
                )Balance,
      December 31, 2008
                
                
                -
                
                
                
                -
                
                
                
                143,742,500
                
                
                
                14,375
                
                
                
                26,786,251
                
                
                
                (27,127,703
                )
                
                
                3,434
                
                
                
                -
                
                
                
                (323,643
                )
  See accompanying
notes to consolidated financial statements.
  5
  ODYSSEY
OIL & ENERGY, INC. & SUBSIDIARIES
 (F/K/A
ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
 (A
DEVELOPMENT STAGE COMPANY)
 CONSOLIDATED
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
 FOR THE PERIOD FROM MAY 28,
2003 (INCEPTION) TO DECEMBER 31, 2009
  Accumulated
                
                
                AccumulatedAdditional
                
                
                Deficit
      During
                
                
                Other
                
                
                DeferredPreferred
      Stock
                
                
                Common
      Stock
                
                
                Paid-In
                
                
                Development
                
                
                Comprehensive
                
                
                StockShares
                
                
                Amount
                
                
                Shares
                
                
                Amount
                
                
                Capital
                
                
                Stage
                
                
                Income
                
                
                Compensation
                
                
                TotalIn-kind
      contribution
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                12,000
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                12,000Additional
      common shares
      issued in connection withacquisition of ALG
      Bio Oils Ltd. ($.20 per share)
                
                
                -
                
                
                
                -
                
                
                
                75,000,000
                
                
                
                7,500
                
                
                
                14,992,500
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                15,000,000Common
      shares issued
      to acquire 51% ofoutstanding common
      shares of H-Power (Pty) Ltd.($.58 per
      share)
                
                
                -
                
                
                
                -
                
                
                
                65,000,000
                
                
                
                6,500
                
                
                
                37,693,500
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                37,700,000Common
      stock issued
      to consultant of ALG Bio OilsLtd. for services
      ($.58 per share)
                
                
                -
                
                
                
                -
                
                
                
                1,356,500
                
                
                
                135
                
                
                
                786,635
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                786,770Common
      stock issued
      to consultant of H-Power (Pty)Ltd. for services
      ($.27 per share)
                
                
                -
                
                
                
                -
                
                
                
                2,200,000
                
                
                
                220
                
                
                
                593,780
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                594,000Common
      shares issued
      to officer for services rendered($.08 per
      share)
                
                
                
                
                
                
                
                
                
                
                5,000,000
                
                
                
                500
                
                
                
                399,500
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                400,000Common
      stock issued for cash ($.12 per share)
                
                
                -
                
                
                
                -
                
                
                
                1,267,500
                
                
                
                127
                
                
                
                152,412
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                152,539Cancellation
      of shares originally issued to acquire 51%of outstanding
      common shares of H-Power (Pty) Ltd.($.23 per
      share)
                
                
                
                
                
                
                
                
                
                
                (65,000,000
                )
                
                
                (6,500
                )
                
                
                (14,943,500
                )
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (14,950,000
                )Other
      comprehensive income
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                3,850
                
                
                
                -
                
                
                
                3,850Net
      loss, 2009
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (39,622,892
                )
                
                
                -
                
                
                
                -
                
                
                
                (39,622,892
                )Balance,
      December 31, 2009
                
                
                -
                
                
                $
                -
                
                
                
                228,566,500
                
                
                $
                22,857
                
                
                $
                66,473,078
                
                
                $
                (66,750,595
                )
                
                $
                7,284
                
                
                $
                -
                
                
                $
                (247,376
                )
 See
accompanying notes to consolidated financial statements.
  6
  ODYSSEY
OIL & ENERGY, INC. & SUBSIDIARIES
 (F/K/A
ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
 (A
DEVELOPMENT STAGE COMPANY)
 CONSOLIDATED STATEMENTS OF
CASH FLOWS
  For
      the Year Ended December 31,
                
                
                For
      the Period fromMay 28,2003
      (Inception) to December2009
                
                
                2008
                
                
                31,
      2009CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
                
                $
                (39,622,892
                )
                
                $
                (22,111,044
                )
                
                $
                (70,496,187
                )Net
      loss from discontinued operations
                
                
                (22,813,536
                )
                
                
                (304,437
                )
                
                
                (31,394,734
                )Loss
      from continuing operations
                
                
                (16,809,356
                )
                
                
                (21,806,607
                )
                
                
                (39,101,453
                )Adjustments
      to reconcile net loss to net cash provided by (used in)Operating
      Activities:In-kind
      contribution
                
                
                12,000
                
                
                
                12,000
                
                
                
                33,000Stock
      issued for services
                
                
                1,186,769
                
                
                
                -
                
                
                
                1,198,769Amortization
                
                
                -
                
                
                
                -
                
                
                
                33,400Impairment
      of investment in oil and gas leases
                
                
                -
                
                
                
                -
                
                
                
                247,931Impairment
      of bio-fuels plant development contract
                
                
                -
                
                
                
                21,717,235
                
                
                
                21,717,055Impairment
      in plant commissioning
                
                
                15,000,000
                
                
                
                -
                
                
                
                15,000,000Loss
      (Gain) on disposal of subsidiaries
                
                
                23,407,430
                
                
                
                -
                
                
                
                -Changes
      in operating assets and liabilities:Increase
      (decrease) in accounts payable andaccrued
      expenses
                
                
                508,716
                
                
                
                12,263
                
                
                
                627,949Cash
      flows from operating activities in continuingoperations
                
                
                (101,871
                )
                
                
                (65,109
                )
                
                
                (243,349
                )Cash
      flows from operating activities in discontinuedoperations
                
                
                593,894
                
                
                
                (3,801
                )
                
                
                (440,497
                )Net
      Cash Provided By (Used In) Operating Activities
                
                
                492,023
                
                
                
                (68,910
                )
                
                
                (683,846
                )CASH
      FLOWS FROM INVESTING ACTIVITIES:Loan
      receivable
                
                
                (729,589
                )
                
                
                -
                
                
                
                (729,589
                )Purchase
      of property and equipment
                
                
                -
                
                
                
                -
                
                
                
                (116,331
                )Purchase
      of website
                
                
                -
                
                
                
                (1,000
                )
                
                
                (1,000
                )Acquisition
      of ALG Bio Oils Ltd. net of cash purchased
                
                
                -
                
                
                
                180
                
                
                
                180Cash
      flows from investing activities in continuingoperations
                
                
                (729,589
                )
                
                
                (820
                )
                
                
                (846,740
                )Cash
      flows from investing activities in discontinuedoperations
                
                
                -
                
                
                
                -
                
                
                
                -Net
      Cash Used In Investing Activities
                
                
                (729,589
                )
                
                
                (820
                )
                
                
                (846,740
                )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from common stock
                
                
                152,539
                
                
                
                -
                
                
                
                152,539Repayment
      of stockholder's loans
                
                
                (15,326
                )
                
                
                -
                
                
                
                (15,935
                )Proceeds
      from loans payable - related parties
                
                
                94,280
                
                
                
                67,042
                
                
                
                345,658Cash
      flows from financing activities in continuingoperations
                
                
                231,493
                
                
                
                67,042
                
                
                
                482,262Cash
      flows from financing activities in discontinuedoperations
                
                
                -
                
                
                
                -
                
                
                
                1,043,118Net
      Cash Provided By Financing Activities
                
                
                231,493
                
                
                
                67,042
                
                
                
                1,525,380EFFECT
      ON EXCHANGE RATE ON CASH
                
                
                9,784
                
                
                
                3,434
                
                
                
                10,113NET
      INCREASE IN CASH
                
                
                3,711
                
                
                
                746
                
                
                
                4,907CASH
      AND CASH EQUIVALENTS AT BEGINNING OFYEAR
                
                
                1,196
                
                
                
                450
                
                
                
                -CASH
      AND CASH EQUIVALENTS AT END OFYEAR
                
                $
                4,907
                
                
                $
                1,196
                
                
                $
                4,907
  See accompanying
notes to consolidated financial statements.
  7
  ODYSSEY
OIL & ENERGY, INC. & SUBSIDIARIES
 (F/K/A
ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
 (A
DEVELOPMENT STAGE COMPANY)
 CONSOLIDATED STATEMENTS OF
CASH FLOWS (CONTINUED)
  For
      the Year Ended December 31,
                
                For
      the Period fromMay 28,2003
      (Inception) to December2009
                
                
                2008
                
                
                31,
      2009SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Cash
      paid for interest
                
                $
                -
                
                
                $
                -
                
                
                $
                -Cash
      paid for income taxes
                
                $
                -
                
                
                $
                -
                
                
                $
                1,824
  SUPPLEMENTAL
DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
 
 In August
2009, the agreement to acquire 51% of H-Power (Pty) Ltd was mutually recinded
and 65 million shareswere
cancelled. The difference in the value of the shares of $22,750,000 was included
in discontinued operations.
  During
2009, the Company issued 5 million shares of common stock to an officer for
services renderedfor a
value of $400,000.
  During
2009, the Company issued 1,356,500 shares of common stock to consultants of ALG
Bio Oils Ltd. for servicesrendered
for a value of $786,770.
  During
2009, the Company issued 2,200,000 shares of common stock to consultants of
H-Power (pty) Ltd. for servicesrendered
for a value of $594,000.
 
 During
2009, the Company issued an additional 75 million shares of common stock in
connection with the acquisitionof ALG
Bio Oils Ltd. for a value of $15,000,000.
  On May
26, 2009, the Company issued 65 million shares of common stock to acquire 51% of
the outstanding commonshares of
H-Power (Pty) Ltd. In August 2009 the agreement was mutually recinded and 65
million shares were cancelled. The
difference in the value of the shares $22,750,000 was included in discontinued
operations.
  During
2008, accounts payable of $250,000 were incurred as a result of additional costs
of investment in uranium mine.
  On June
16, 2008, the Company assumed $17,235 of notes payable as part of the
acquisition of ALG Bio Oils Ltd.
  On June
16, 2008, the Company issued 35 million shares of common stock to acquire 100%
ofthe
outstanding common shares of ALG Bio Oils Ltd.
  During
March 2008, the Company issued 450,000 shares of common stock with a fair value
of $367,500 to aconsultant
for services.
  On
November 20, 2007, the Company issued 15 million shares of common stock to
acquire 100% ofthe
outstanding common shares of Uranium Acquisition Corp., Inc.
  On April
21, 2006, the Company issued 60 million shares of common stock to purchase a 10%
workinginterest
in oil and gas leases in Texas for $165,000 from a related public
company.
 
 On April
21, 2006, the Company exchanged all of its ownership in CardioBioMedical
Corporation to the originalstockholders
for 66,232,527 common shares of Odyssey and the warrants to purchase 19,500,000
shares ofthe
Company's common stock was cancelled.
  During
2003, the Company issued 49,500,000 shares of common stock with a fair value of
$1,650,000 for thelicense
rights to the bio-cybernetic technology and frequency analysis
technology.
  During
2005, the Company cancelled 49,500,000 shares of common stock with a fair value
of $495,000 for thetermination
of the exclusive rights to the bio-cybernetic technology and frequency analysis
technology.
  During
2005, the Company issued warrants to purchase 19,500,000 shares of common stock
at $.003 for thenon-exclusive
rights to the bio-cybernetic technology and frequency analysis technology valued
at $143,238.
  See accompanying notes to consolidated financial statements.
  8
  ODYSSEY
OIL & ENERGY, INC. & SUBSIDIARIES
 (F/K/A
ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2009 AND
2008
 
 NOTE
      1
                  SUMMARY OF SIGNIFICANT
      ACCOUNTING POLICIES AND
ORGANIZATION
 
 (A) Organization and Basis
of Presentation
 
 Odyssey
Oil & Energy, Inc. (F/K/A Odyssey Oil & Gas, Inc. and previously
Advanced Sports Technologies, Inc) is a Florida corporation incorporated on
August 9, 2001. Effective September 20, 2008, the Articles of Incorporation were
amended to change the name of the corporation to Odyssey Oil & Energy, Inc.
Through its acquisition of ALG Bio Oils Ltd., the Company wholly owns a South
African company that has a preferred contract with a company to develop a
commercial bio-fuels plant (See Note 2). Through its acquisition of H-Power
(Pty) Ltd, the Company has a 51% interest in a South African company that owns
an exclusive license to design, develop, manufacture and market products based
on the Hybrid Battery Technology worldwide (See Note 2). In August 2009 the
agreement to acquire the 51% interest in H-Power (Pty) Ltd was mutually
rescinded. In October 2009, the Company’s interest in Uranium Acquisition Corp.,
Inc. whose sole asset was a 49% interest in MCA Uranium One (Pty) Limited was
transferred back to its original stockholders (See Note 8).
 
 (B) Principles of
Consolidation
 
 The
financial statements for 2009 and 2008 include the accounts of Odyssey Oil &
Energy, Inc., Uranium Acquisition Corp., Inc. (“Uranium”) (a development stage
company), whose sole asset is a 49% interest in MCA Uranium One (Pty) Limited
through the date of disposal, and ALG Bio Oils Ltd. (a development stage
company) acquired June 16, 2008. The financial statements for 2009 also include
the accounts of H-Power (Pty) Ltd for the period May 26, 2009 to August 27,
2009. (a development stage company), a 51% ownership of which was acquired on
May 26, 2009.  The agreement to acquire the 51% of H-Power (Pty) Ltd
was mutually rescinded on August 27, 2009. All inter-company accounts during the
period of consolidation have been eliminated.
 
 On April
21, 2006, the Company exchanged all of its ownership in CardioBioMedical
Corporation to the original stockholders. All amounts relating to the operations
of CardioBioMedical Corporation have been reflected as discontinued operations.
CardioBioMedical Corporation originally merged with Odyssey Oil & Gas, Inc.
(F/K/A Advanced Sports Technologies, Inc.) on September 23, 2005. In August 2009
the agreement to acquire the 51% interest in H-Power (Pty) Ltd was mutually
rescinded. In October 2009, the Company’s interest in Uranium Acquisition Corp.,
Inc. whose sole asset was a 49% interest in MCA Uranium One (Pty) Limited was
transferred back to its original stockholders (See Note 8). Therefore as of
December 31, 2009, also included in discontinued operations is Uranium
Acquisition Corp, Inc. and H-Power (Pty) Ltd.
  9
 ODYSSEY
OIL & ENERGY, INC. & SUBSIDIARIES
 (F/K/A
ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2009 AND
2008
 Odyssey
Oil & Energy, Inc. (F/K/A Odyssey Oil & Gas, Inc. and previously
Advanced Sports Technologies, Inc.) is hereafter referred to as the
“Company.”
  (C) Website Development
Costs
  The
Company has adopted the provisions of Accounting Standards Codification No.
350,Intangibles - Goodwill
and Other.  Costs incurred in the planning stage of a website are
expensed while costs incurred in the development stage are capitalized and
amortized over the estimated three-year life of the asset. For the years
ended December 31, 2009 and 2008, the Company paid $0 and $1,000 respectively to
develop its website.
  (D) Loan
Receivable
  Upon
acquiring H Power in May 2009, the Company invested $729,589 in the operations
of H Power. As of December 31, 2009, H Power is a discontinued operation
therefore these amounts are no longer eliminated in consolidation as an
intercompany transaction and are owed to the Company as part of the cancellation
agreement. (See Note 12)
  (E) Patent
Costs
 
 Patent
costs totaling $82,872 incurred in connection with its Hybrid Battery Technology
have been capitalized and accounted for in accordance with FASB Accounting
Standards Codification No. 350,Intangibles - Goodwill and
Other. Under FASB ASC No. 350. Intangible assets with a finite
useful life are amortized.An intangible asset with an
indefinite useful life is not amortized but is reviewed for evidence or
changes in circumstances that indicate that their carrying value may not berecoverable. Patent
costs are included in the loss from discontinued operations (See Note
8).
 
 (F) Fair Value of
Financial Instruments
 
 The
carrying amounts of the Company’s financial instruments including loans
receivable, accounts payable and accrued expenses and loans payable – related
parties approximate fair value due to the relatively short period to maturity
for these instruments.
 
 (G) Revenue
Recognition
 
 Revenue
from its interest in the oil and gas leases was recognized when production was
sold to a purchaser at a fixed or determinable price, when delivery had occurred
and title had transferred and collectability of the revenue was
probable.
  10
 ODYSSEY
OIL & ENERGY, INC. & SUBSIDIARIES
 (F/K/A
ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2009 AND
2008
 (H) Income
Taxes
 
 The
Company accounts for income taxes under the FASB Accounting Standards
Codification No. 740, Income
Taxes.  Under FASB ASC No. 740, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled.  Under FASB ASC No. 740, the effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date.
 
 (I) Loss Per
Share
 
 Basic and
diluted net loss per common share is computed based upon the weighted average
common shares outstanding as defined by FASB Accounting Standards Codification
No. 260,Earnings per
Share.  As of December 31, 2009 and 2008, there were no common stock
equivalents.
 
 (J) Cash and Cash
Equivalents
 
 The
Company considers all highly liquid temporary cash investments with an original
maturity of three months or less to be cash equivalents. The Company did not
have any cash equivalents as of the balance sheet dates presented in the
financial statements.
 
 (K) Use of
Estimates
 
 In
preparing financial statements in conformity with generally accepted accounting
principles, management is required to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and revenues and
expenses during the reported period.  Actual results could differ from
those estimates.
 
 (L) Stock
Split
 
 Effective
May 1, 2008, the Board of Directors approved a 3 for 1 stock split. As a result
of the stock split, all share and per share data have been retroactively
adjusted to give effect to the stock split.
 
 (M)
Impairment
 
 The
Company accounts for any impairment in accordance with FASB Accounting Standards
Codification No. 350,Intangibles - Goodwill and Other. Under FASB ASC No. 350, intangible
assets are reviewed for evidence or changes in circumstances that indicate that
their carrying value may not berecoverable. TheCompany periodically
reviews the carrying value to determine whether or not an impairment to such
value has occurred.
  11
  ODYSSEY
OIL & ENERGY, INC. & SUBSIDIARIES
 (F/K/A
ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2009 AND
2008
 (N) Foreign Currency
Translation
 
 The
functional currency of the Company is the United States Dollar.  The
financial statements of the Company are translated to United States dollars
using period-end exchange rates as to assets and liabilities and average
exchange rates as to revenues and expenses.  Capital accounts are
translated at their historical exchange rates when the capital transaction
occurred.  Net gains and losses resulting from foreign
exchange translations are included in the statements of operations and
stockholders’ equity as other comprehensive income (loss).
 
 (O)
Recent Accounting Pronouncements
 
 In
June 2009, the FASB issued ASC 105 Accounting Standards CodificationTM
and           the
Hierarchy of Generally Accepted Accounting Principles. The FASB Accounting
Standards CodificationTM (the
“Codification”) has become the source of authoritative accounting principles
recognized by the FASB to be applied by nongovernmental entities in the
preparation of financial statements in accordance with Generally Accepted
Accounting Principles (“GAAP”). All existing accounting standard documents are
superseded by the Codification and any accounting literature not included in the
Codification will not be authoritative. Rules and interpretive releases of the
SEC issued under the authority of federal securities laws, however, will
continue to be the source of authoritative generally accepted accounting
principles for SEC registrants. Effective September 15, 2009, all
references made to GAAP in our consolidated financial statements will include
references to the new Codification. The Codification does not change or alter
existing GAAP and, therefore, did not have an impact on our financial position,
results of operations or cash flows.
 
 In June
2009, the FASB issued changes to the consolidation guidance applicable to a
variable interest entity (VIE). FASB ASC Topic 810, "Consolidation," amends the
guidance governing the determination of whether an enterprise is the primary
beneficiary of a VIE, and is, therefore, required to consolidate an entity, by
requiring a qualitative analysis rather than a quantitative analysis. The
qualitative analysis will include, among other things, consideration of who has
the power to direct the activities of the entity that most significantly impact
the entity's economic performance and who has the obligation to absorb losses or
the right to receive benefits of the VIE that could potentially be significant
to the VIE. This standard also requires continuous reassessments of whether an
enterprise is the primary beneficiary of a VIE. FASB ASC 810 also requires
enhanced disclosures about an enterprise's involvement with a VIE. Topic 810 is
effective as of the beginning of interim and annual reporting periods that begin
after November 15, 2009. This will not have an impact on the Company’s financial
position, results of operations or cash flows.
  12
 ODYSSEY
OIL & ENERGY, INC. & SUBSIDIARIES
 (F/K/A
ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2009 AND
2008
 In June
2009, the FASB issued Financial Accounting Standards Codification No. 860 -
Transfers and Servicing. FASB ASC No. 860 improves the relevance,
representational faithfulness, and comparability of the information that a
reporting entity provides in its financial statements about a transfer of
financial assets; the effects of a transfer on its financial position, financial
performance, and cash flows; and a transferor's continuing involvement, if any,
in transferred financial assets. FASB ASC No. 860 is effective as of the
beginning of each reporting entity's first annual reporting period that begins
after November 15, 2009, for interim periods within that first annual reporting
period and for interim and annual reporting periods thereafter. The Company is
evaluating the impact the adoption of FASB ASC No. 860 will have on its
financial statements.
 
 NOTE
      2
                  ACQUISITIONS
 
 (A) Hybrid Battery
Technology Company
 
 On May
26, 2009, the Company acquired 51% of the outstanding common shares of H- Power
(Pty) Ltd., a South Africa development stage company through a share purchase
agreement.  The Company owns an exclusive license to design, develop,
manufacture and market products based on the Hybrid Battery Technology
worldwide. The agreement originally called for the Company to issue 95 million
restricted common shares but was subsequently amended to 65 million. The fair
value of the common shares issued was $37,700,000. The following summarizes the
fair values of the assets acquired and liabilities assumed at the date of
acquisition:
 
 Cash
                    
                    $
                    16Intangible
      asset
                    
                    
                    37,877,722Total
      Assets Acquired
                    
                    
                    37,877,738Loans
      payable
                    
                    
                    (177,932
                    )Non-controlled
      interest
                    
                    
                    194Net Assets Acquired
                    
                    $
                    37,700,000
 The intangible asset was assigned to
the Hybrid Battery Technology exclusive license. Because of the uncertainty of
profitability and success of the technology and the uncertainty of the Company
to successfully raise funds for this technology, the intangible asset was
impaired during the year ended December 31, 2009.
 
 In
August, 2009, the agreement was cancelled and the original common shares issued
were returned at a price of $0.23 per share. Accordingly, all amounts relating
to the operations of H- Power (Pty) Ltd. have been reflected as discontinued
operations (see Note 8).
  13
 ODYSSEY
OIL & ENERGY, INC. & SUBSIDIARIES
 (F/K/A
ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2009 AND
2008
 (B) Bio-Fuels
Company
 
 On June 16, 2008, the Company acquired
100% of the outstanding common shares of ALG Bio Oils
Ltd., a Cyprus development stage company, through a share purchase
agreement.  ALG Bio Oils Ltd. owns 100% of the outstanding shares of
ALG Western Oil (Pty) Ltd., a South African company that has a preferred
contract with a company to develop a commercial bio-fuels plant. The Company
issued 35 million restricted common shares with a fair value of $21,700,000. An
additional 75 million restricted common shares were contingent upon the
occurrence of future specific events. These additional shares were issued on May
5, 2009 (See Note 9) and an additional impairment of $15,000,000 was
recorded.
 
 The
following summarizes the fair values of the assets acquired and liabilities
assumed at the date of acquisition:
  Cash
                    
                    $
                    180Intangible
      asset
                    
                    
                    21,717,235Total
      Assets Acquired
                    
                    
                    21,717,415Loans payable
                    
                    
                    (17,415
                    )Net
      Assets Acquired
                    
                    $
                    21,700,000
 The
intangible asset was assigned to the bio-fuels plant development contract.
Because of the uncertainty of completion and success of the project and the
uncertainty of the Company to successfully raise funds for this project, the
intangible asset was impaired during the years ended December 31, 2009 and 2008
of $15,000,000 and $21,717,235 respectively.
 
 (C) Mining
Company
 
 On
November 20, 2007, the Company acquired 100% of the outstanding common shares of
Uranium Acquisition Corp., Inc., a Florida development stage company through a
share purchase agreement. Uranium Acquisition Corp., Inc. owns a 49% interest in
MCA Uranium One (Pty) Limited, a South African company which owns a
non-operating uranium mine in the Bela Bela district in South Africa. The share
purchase agreement also requires each shareholder to provide funding based on
the shareholders’ percentage of the pro rata amount of shares held based on the
future funding requirements of Uranium. If a shareholder does not provide the
required loans, the agreement gives the remaining shareholders the right to
force the sale of shares held by the non-compliant shareholder.
 
 Accounting
Standards Codification No 810- consolidation provides guidance on the
consolidation of certain entities when control exists through means other than
ownership of voting (or similar) interests and was effective for public entities
that have interests in variable interest entities commonly referred to as
special purpose entities for the first reporting period that ends after March
15, 2004. Under FASB ASC No. 810 requires consolidation by the majority holder
of expected residual gains and losses of the activities of a variable interest
entity (“VIE”).
  14
 ODYSSEY
OIL & ENERGY, INC. & SUBSIDIARIES
 (F/K/A
ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2009 AND
2008
 As of
November 20, 2007, the Company owned a 49% interest in MCA through it’s
acquisition of Uranium Acquisition Corp, Inc. The Company had agreed to provide
financial support to MCA to fund all exploration costs up to the point of
proving the existence of ore. The Company had concluded that MCA meets the
definition of a VIE because MCA is dependent on the Company for its funding and
was consolidated with the Company.
  The
Company issued 15 million restricted common shares with a fair value of
$4,250,000 ($0.28 per share based upon latest traded closing price). Under FASB
Accounting Standards Codification No. 360, “Accounting   for the
Impairment or Disposal of Long-Lived Assets” and SEC Industry Guide 7,
“Description of Property by
Issuers Engaged or to be Engaged in Significant Mining Operations,” the
purchase price has been expensed as acquisition costs. In addition, during the
year ended December 31, 2008, the Company incurred other costs related to its
investment totaling $250,000. These additional costs have been impaired as the
Company has determined that there are no commercially minable deposits. The
effect of the VIE’s consolidation on the Company’s consolidated balance sheet at
December 31, 2008, was an increase in the Company’s assets of $5 and an
increase in the Company’s liabilities of $620,934. The Company also recognized
non-controlling income of $316,864 for the year ended December 31, 2008. In
October 2009, the Company’s interest in Uranium Acquisition Corp., Inc. was
transferred back to its original stockholders (See Note 8).
 
 NOTE
      3
                  INVESTMENT IN OIL AND
      GAS LEASES
 
 On April
21, 2006, the Company issued 20 million shares of common stock to purchase a 10%
working interest in oil and gas leases in Texas for $165,000 ($.008 per share)
from Centurion Gold Holdings, Inc., a related public company.  The
investment was recorded at historical cost equal to the amount recorded by
Centurion Gold Holdings, Inc. The investment was being accounted for under the
cost method of accounting.
 
 During
the year ended December 31, 2007, the unamortized cost of the investment in oil
and gas leases of $247,931 was expensed as the gas well was plugged and
abandoned at the recommendation of the operator.
 
 NOTE
      4
                  LOANS PAYABLE –
      RELATED PARTY
 
 During
the years ended December 31, 2009 and 2008, a related party advanced an
additional $62,584 and $62,728, respectively, in payment of operating and
development expenses. In addition, principal repayments of $15,326 were made.
These advances, totaling $295,565 and $251,593 as of December 31, 2009 and 2008,
respectively, are unsecured, bear interest at 10% per annum and are due on
demand. Accrued interest for loans payable – related party was $70,106 and
$42,173 as of December 31, 2009 and 2008, respectively.
  15
 ODYSSEY
OIL & ENERGY, INC. & SUBSIDIARIES
 (F/K/A
ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2009 AND
2008
 Subsequent
to December 31, 2009, an additional $2,500 in payment of operating expenses was
advanced (See Note 13).
 
 During
the year ended December 31, 2009 and 2008, a related party advanced to ALG Bio
Oils Ltd, the Company’s wholly owned subsidiary, $37,984 and $4,314,
respectively, in payment of operating expenses. In addition, as of December 31,
2008, the Company assumed as part of the acquisition $17,235 of notes
payable.These
advances, totaling $59,359 and $21,279 as of December 31, 2009 and 2008,
respectively non-interest bearing and are due at the discretion of the director.
Subsequent to December 31, 2009, approximately $10,244 was repaid to a related
party for advances during 2009. (See Note 12).
 
 NOTE
      5
                  STOCKHOLDERS’
      EQUITY
 
 Effective
September 20, 2008, the Articles of Incorporation were amended to increase the
number of authorized common shares to 650,000,000 from 250,000,000.
 
 (A) Common Stock Issued for
Cash
 
 During
2003, the Company issued 7,500 shares of common stock to its founder for cash of
$250 ($0.033 per share).
 
 During
2003, the Company issued 2,400,000 shares of common stock for cash of $80,000
($0.033 per share).
 
 During
2003, the Company issued 833,334 shares of common stock for cash of $125,000
($0.15 per share).
 
 During
2004, the Company issued 2,016,693 shares of common stock for cash of $302,503
($0.15 per share).
 
 During
2005, the Company issued 33,292,500 shares of common stock to the stockholders
of Advanced Sports upon completion of the merger.
 
 During
the year ended December 31, 2009, the Company issued 1,267,500 shares of common
stock for cash of $152,539 ($0.12 per share).
  16
 ODYSSEY
OIL & ENERGY, INC. & SUBSIDIARIES
 (F/K/A
ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2009 AND
2008
 (B)
Common Stock Issued for Services
 
 During
2003, the Company issued 21,375,000 shares of common stock for officer
compensation valued for financial accounting purposes at $712,500 ($0.033 per
share) based upon recent cash offering prices. The initial 7,500 shares issued
upon formation of the corporation were purchased for $.033 per
share.
 
 During
2003, the Company issued 49,500,000 shares of common stock for licensing rights
valued for financial accounting purposes at $1,650,000 ($0.033 per share, the
price paid for the initial 7,500 shares issued upon formation of the
corporation) based upon recent cash offering prices.  During 2005,
these 49,500,000 shares of common stock were cancelled pursuant to a settlement
agreement dated September 16, 2005. Under the terms of this agreement, a
nontransferable warrant for 19,500,000 common shares at $0.033 per share was
issued for the nonexclusive right to the technology. This warrant is exercisable
between January 1, 2007 and December 31, 2014. The fair value of the warrants
was estimated on the grant date using the Black-Scholes option pricing model as
required by FASB Accounting Standards Codification No. 505, Equity Based
Payments with the following assumptions: expected dividend yield 0%, volatility
1%, risk-free interest rate of return of 3.28% and expected life of
7 years.  The value of $143,238 was recorded as intangible
license rights and will be amortized over the patent life of approximately 14
years.
  During
2003, the Company issued 24,600,000 shares of common stock for consulting
services valued for financial accounting purposes at $820,000 ($0.033 per share)
based upon recent cash offering prices.
 
 During
2005, the Company issued 15,000,000 shares of common stock to its Chief
Executive Officer and President in recognition and consideration of his service
as an officer and director of the Company since June 2003 and his contributions
to the progress and development of the Company.  For financial
accounting purposes, these shares were valued at $150,000 ($0.01 per share)
based upon recent market prices of the Company.
 
 Effective
January 1 2008, the Company entered into three one year contracts for consulting
services. As consideration, the Company issued 450,000 shares of common stock
valued for financial accounting purposes at $367,500 ($.82 per share) based upon
recent market prices of the Company. The value of the services is being
recognized over the contract term. As of December 31, 2008, the Company has
recorded $367,500 as consulting expense.
 
 During
the year ended December 31, 2009, the Company issued 1,356,500 shares of common
stock for consulting services relating to its ALG Bio Oils Ltd. subsidiary. The
shares were valued for financial accounting purposes at $786,770 ($.58 per
share) based upon recent market prices of the Company.
  17
 ODYSSEY
OIL & ENERGY, INC. & SUBSIDIARIES
 (F/K/A
ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2009 AND
2008
 During
the year ended December 31, 2009, the Company issued 2,200,000 shares of common
stock for consulting services relating to former subsidiary H-Power (Pty) Ltd.
The shares were valued for financial accounting purposes at $594,000 ($.27 per
share) based upon recent market prices of the Company.
 
 During
the year ended December 31, 2009, the Company issued 5 million shares of common
stock to an officer. The shares were valued for financial accounting purposes at
$400,000 ($.08 per share) based upon recent market prices of the
Company.
 
 (C) In-Kind
Contribution
 
 During
the years ended December 31, 2009, 2008, 2007, 2006, and 2005, the Company
recorded additional paid-in capital of $12,000 for the fair value of rent and
services contributed to the Company by its president.
 
 (D) Common Stock Issued in
Exchange of Assets
 
 On April
21, 2006, the Company exchanged all of its ownership in CardioBioMedical
Corporation to the original stockholders for 66,232,527 common shares of Odyssey
and the warrant issued to purchase 19,500,000 shares of the Company’s common
stock was cancelled based on the book value of assets and liabilities on the
date of exchange.
 
 On April
21, 2006, the Company issued 60 million shares of common stock to purchase a 10%
working interest in certain gas and oil leases in Texas for $165,000 ($.003 per
share) from Centurion Gold Holdings, Inc., a related public
company.
 
 On
November 20, 2007, the Company issued 15 million restricted common shares with a
fair value of $4,250,000 ($0.28 per share based upon latest traded closing
price) to acquire 100% of the outstanding common shares of Uranium Acquisition
Corp., Inc. (See Note 2).
 
 OnJune 16, 2008, the Company
issued 35 million restricted common shares with a fair value
 of
$21,700,000($0.62
per share based upon latest traded closing price) to acquire 100%
 of the
outstanding common shares of ALG Bio Oils Ltd. (See Note 2).
 
 On May 5,
2009, the Company issued an additional 75 million shares with a fair value of
$15,000,000 ($0.20 per share based upon latest traded closing price) in
connection with the acquisition of ALG Bio Oils Ltd. (See Note 2).
 
 On May
26, 2009, the Company issued 65 million restricted common shares with a fair
value of $37,700,000 ($0.58 per share based upon latest traded closing price) to
acquire 51% of the outstanding common shares of H-Power (Pty) Ltd. (See Note 2).
These shares were cancelled on August 27, 2009 upon the cancellation agreement
between the Company and H-Power (Pty) Ltd at $0.23 per share ($14,950,000). The
Company recognized a loss on the cancellation agreement of $1,080,000, which has
been included in the gain on disposal of subsidiaries on the Statement of
Operations.
  18
 ODYSSEY
OIL & ENERGY, INC. & SUBSIDIARIES
 (F/K/A
ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2009 AND
2008
 NOTE
      6
                  RELATED PARTY
      TRANSACTIONS
 
 See Notes
4 and 5.
 
 NOTE
      7
                  INCOME
      TAXES
 
 Income
tax expense (benefit) for the periods ended December 31, 2009 and 2008 is
summarized as follows:
  2009
                  
                  
                  2008Current:Federal
                  
                  $
                  -
                  
                  
                  $
                  -State
                  
                  
                  -
                  
                  
                  
                  -Deferred
      - Federal and State
                  
                  
                  -
                  
                  
                  
                  -Income
      tax expense (benefit)
                  
                  $
                  -
                  
                  
                  $
                  -
 
 The
Company's tax expense differs from the "expected" tax expense for the periods
ended December 31, 2009 and 2008 as follows:
 
 2009
                  
                  
                  2008U.S.
      Federal income tax expense (benefit)
                  
                  $
                  (13,469,307
                  )
                  
                  $
                  (7,517,755
                  )State
      income tax expense (benefit)
                  
                  
                  (1,438,047
                  )
                  
                  
                  (802,631
                  )Permanent
      difference
                  
                  
                  5,368,628
                  
                  
                  
                  54,116Effect
      on net operating loss carryforward
                  
                  
                  9,538,726
                  
                  
                  
                  8,266,270$
                  -
                  
                  
                  $
                  -
 
 The tax
effects of temporary differences that give rise to significant portions of
deferred tax assets and liabilities at December 31, 2009 and 2008 are as
follows:
 
 2009
                  
                  
                  2008Deferred
      tax assets:Net
      operating loss carryforward
                  
                  $
                  9,776,734
                  
                  
                  $
                  238,008Total
      gross deferred tax assets
                  
                  
                  9,776,734
                  
                  
                  
                  238,008Less
      valuation allowance
                  
                  
                  (9,776,734
                  )
                  
                  
                  (238,008
                  )Net
      deferred tax assets
                  
                  $
                  -
                  
                  
                  $
                  -
  19
 ODYSSEY
OIL & ENERGY, INC. & SUBSIDIARIES
 (F/K/A
ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2009 AND
2008
 At
December 31, 2009, the Company had a net operating loss carryforward of
approximately $9,776,734 for U.S. Federal income tax purposes available to
offset future taxable income expiring through 2029.  All other losses
incurred by the Company prior to the change in control are not available due to
Internal Revenue Code Section 382 which restricts the deductibility of prior net
operating losses where there has been a change in control.  The net
change in the valuation allowance during the year ended December 31, 2009 was an
increase of $9,538,726.
 
 NOTE
      8
                  DISCONTINUED
      OPERATIONS
 
 Pursuant
to an agreement to dispose of the assets and liabilities of its interest in H-
Power (Pty) Ltd., all amounts relating to its operations have been reflected as
discontinued operations.  Also included are the disposal of the assets
and liabilities of its interest in MCA Uranium One (Pty) Limited on October 24,
2009.
 
 a) Discontinued
operations
 
 The
results of the discontinued operations for each of the years ended December 31,
2009 and 2008 are summarized as follows:
  Year
      ended December 31,2009
                    
                    
                    2008
                    
                    
                    InceptionRevenue
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -Operating
      expenses
                    
                    
                    (23,558,654
                    )
                    
                    
                    (304,437
                    )
                    
                    
                    (32,139,852
                    )Gain on disposal of subsidiaries
                    
                    
                    745,118
                    
                    
                    
                    -
                    
                    
                    
                    745,118Loss
      from discontinued operations
                    
                    $
                    (22,813,536
                    )
                    
                    $
                    (304,437
                    )
                    
                    $
                    (31,394,734
                    )
  b)
Assets and liabilities held for sale-discontinued operations
 
 The
Company has also reclassified the major classes of assets and liabilities in the Consolidated
Balance Sheet in accordance with FASB Accounting Standards Codification No. 350,
Intangibles - Goodwill and
Other, as follows:
 As
      of December 31, 2009
                    
                    
                    As
      of December 31, 2008Cash
                    
                    $
                    -
                    
                    
                    $
                    -Patent
      costs
                    
                    -
                    
                    
                    
                    -Accounts
      payable and accrued expenses
                    
                    
                    -
                    
                    
                    
                    253,434Notes payable
                    
                    
                    -
                    
                    
                    
                    -$
                    -
                    
                    
                    $
                    253,434
 20
 ODYSSEY
OIL & ENERGY, INC. & SUBSIDIARIES
 (F/K/A
ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2009 AND
2008
 On April
21, 2006, the ownership of CardioBioMedical Corporation was exchanged for
66,232,527 shares of Odyssey common stock to the original
stockholders.  Accordingly, all amounts relating to the operations of
CardioBioMedical Corporation have been reflected as discontinued operations. The
net book value of assets and liabilities of CardioBioMedical Corporation was
recorded as a distribution on the date of exchange. The loss from discontinued
operations was equal to operating expenses of CardioBioMedical
Corporation.
 
 NOTE
      9
                    COMMITMENTS AND
      CONTINGENCIES
 
 Purchase
Agreements
 
 Uranium Acquisition
Corp.
 
 During
November 2007, the Company signed an agreement under which it acquired 100% of
the outstanding shares of Uranium Acquisition Corp., Inc. (“Uranium”), a Florida
corporation. The agreement called for the Company to issue 15 million shares of
Company stock upon signing of the agreement.  The agreement also calls
for the Company to issue 30 million shares upon approval of a mining license. In
addition, the agreement calls for the Company to deliver 75 million shares of
common stock, within 18 months of the signature of the agreement, upon the
proving up of uranium reserves being substantially the same as per the “Summary
of Geological Area and Write up” presented by Mineral Capital
Assets.
 
 The
agreement requires each shareholder to provide funding based on the
shareholders’ percentage of the pro rata amount of shares held based on the
future funding requirements of Uranium. If a shareholder does not provide the
required loans, the agreement gives the remaining shareholders the right to
force the sale of shares held by the non-compliant shareholder. The agreement
gives the controlling interest shareholders the right of first refusal on any
shares held by the Company at a price to be determined by the
shareholders.  As of December 31, 2008, no uranium reserves have been
proven and no additional shares have been issued under the agreement, however
during the year ended December 31, 2008, the Company incurred other costs
related to its investment totaling $250,000. These additional costs have been
impaired as the Company has determined that there are no commercially minable
deposits. In October 2009, the Company’s interest in Uranium Acquisition Corp.,
Inc. was transferred back to its original stockholders (See Note
8).
 
 ALG Bio Oils
Ltd.
 
 During
June 2008, the Company signed an agreement under which it acquired 100% of the
outstanding shares of ALG Bio Oils Ltd. The agreement called for the Company to
issue 35 million shares of Company stock upon signing of the agreement. The
agreement also called for the Company to issue an additional 25 million shares
upon each of the following events:
 
 1. The
successful commissioning of a bio-fuels pilot plant,
  21
 ODYSSEY
OIL & ENERGY, INC. & SUBSIDIARIES
 (F/K/A
ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2009 AND
2008
 2. The
ordering of a commercial bio-fuels plant, and
  3. The
commissioning of a commercial bio-fuels plant.
 
 On June
16, 2009, the agreement was amended such that the Company was to issue a total
of 75 million additional shares upon the following events:
 
 1.
Twenty-five million shares upon the selection of a project team.
  2. Twenty
million shares upon a decision by the project team on the technology to be
used for the pilot plant
  3.
Fifteen million shares when algae strain has been identified, isolated and
successfully growing in a laboratory.
  4. Ten
million shares upon funding approval and order placed for acquisition of pilot
plant.
  5. Five
million shares upon commissioning of pilot plant.
 
 As of
December 31, 2009, the required events have been completed and the additional 75
million shares due under the agreement were issued with a value for financial
accounting purposes of $15,000,000 ($.20 per share) based upon recent market
prices of the Company. Because of the uncertainty of completion and success of
the project and the uncertainty of the Company to successfully raise funds for
this project, this intangible asset was impaired during year ended December 31,
2009.
 
 NOTE
      10
                    GOING
      CONCERN
 
 As
reflected in the accompanying financial statements, the Company is in the
development stage with an accumulated deficit of $66,750,595, a working capital
deficiency of $248,376 as of December 31, 2009 and net cash used in continuing
operations of $243,349 from inception. These factors raise substantial doubt
about its ability to continue as a going concern. The ability of the Company to
continue as a going concern is dependent on the Company’s ability to raise
additional capital and implement its business plan. The financial statements do
not include any adjustments that might be necessary if the Company is unable to
continue as a going concern.
 
 To date,
related parties have funded our operating cash requirements. Management has
received verbal assurances from these related parties that such funding will
continue as needed. Based on these assurances, management expects that the
Company will be able to continue to develop its interests in ALG Bio Oils Ltd.
and execute its plan of operations and continue as a going concern.
  22
 ODYSSEY
OIL & ENERGY, INC. & SUBSIDIARIES
 (F/K/A
ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2009 AND
2008
 NOTE
      11
                    SEGMENT
      REPORTING
 
 The
accounting policies of the segments are the same as those described in
“Organization and Basis of Presentation” above. The Company’s business is
currently conducted principally in South Africa. As of December 31, 2009 and
2008, the Company had $3,902 and $593, respectively, of assets located in South
Africa.
  The
following table summarizes segment information:
  Year
      Ended December 31, 2009
                    
                    Bio
      Fuels
                    
                    
                    Other
                    
                    
                    ConsolidatedImpairment
      expense
                    
                    $
                    15,000,000
                    
                    
                    $
                    -
                    
                    
                    $
                    15,000,000Purchase
      of property and equipment
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Net
      Loss
                    
                    
                    (15,814,463
                    )
                    
                    
                    (994,893
                    )
                    
                    
                    (16,809,356
                    )Total
      Assets
                    
                    
                    3,902
                    
                    
                    
                    2,005
                    
                    
                    
                    5,907Total
      Liabilities
                    
                    
                    59,263
                    
                    
                    
                    1,020,459
                    
                    
                    
                    1,079,722
  Year
      Ended December 31, 2008
                    
                    Bio-Fuels
                    
                    
                    Other
                    
                    
                    ConsolidatedImpairment
      expense
                    
                    $
                    21,717,235
                    
                    
                    $
                    250,000
                    
                    
                    $
                    21,967,235Purchase
      of property and equipment
                    
                    
                    -
                    
                    
                    
                    (1,000
                    )
                    
                    
                    (1,000
                    )Net
      Loss
                    
                    
                    (21,724,198
                    )
                    
                    
                    (386,846
                    )
                    
                    
                    (22,111,044
                    )Total
      Assets
                    
                    
                    593
                    
                    
                    
                    1,603
                    
                    
                    
                    2,196Total
      Liabilities
                    
                    
                    21,729
                    
                    
                    
                    620,974
                    
                    
                    
                    642,703
  NOTE
      12
                    SUBSEQUENT
      EVENTS
 
 Subsequent
to December 31, 2009, an additional $2,500 was advanced by a related party.
These advances are unsecured, bear interest at 10% per annum and are due on
demand (Note 4).
 
 Subsequent
to December 31, 2009, approximately $10,244 was repaid from ALG Western Oils
(Pty) Ltd, the Company’s wholly owned subsidiary, to a related party. The loans
are non-interest bearing and are due at the discretion of the director (Note
4).
 
 Subsequent
to December 31, 2009 the Company entered into an understanding to invest in
Hylem Water (Pty) Ltd. The Company made an initial investment of approximately
$14,500. Further investments totaling approximately $2,590,000 are due by August
31, 2010 for a total investment by the Company of 51%.
 
 Subsequent
to December 31, 2009 an amount of approximately $27,500 was advanced by related
parties to ALG Western Oils (Pty) Ltd to make the initial investment in Hylem
Water (Pty) Ltd. The loans were non-interest bearing and have been repaid to the
related parties.
     23