UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


WASHINGTON,
      DC 20549




FORM
      10 -
      KSB


CURRENT
      REPORT




PURSUANT
      TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934




Date
      of
      report (Date of earliest event reported): December 31, 2006




**ODYSSEY
      OIL AND GAS, INC.**





(Exact
      Name of Registrant as Specified in Charter)




Florida
            
            333-106299
            
            65-1139235(State
                or Other Jurisdiction
              of
                Incorporation)
            
            (Commission
              File
                Number)
            
            (IRS
                Employer
              Identification
                No.)




5005
      Riverway, Suite 440


Houston,
      TX 77056





Address
      of Principal Executive Offices




(713)
      623-2219





(Issuer's
      telephone number)




ADVANCED
      SPORTS TECHNOLOGIES, INC.


9700
      Via
      Emilie, Boca Raton, Florida, 33428





(Former
      Name or Former Address, if Changed Since Last Report)




SECURITIES
      REGISTERED PURSUANT TO SECTION 12 (G) OF THE ACT: NONE




Common
      Stock, par value $ 0.001 per share


(Title
      of
      Class)




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




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




The
      Company's revenues for the year ended December 31, 2006 were
      $19,245.




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b2
      of the Exchange Act). Yes |X| No |_| .




As
      of
      March 26, 2007, the aggregate market value of the voting stock held by
      non-affiliates of the registrant (based on a value of $.025 per share on March
      26, 2007 was $277,438.)




As
      of
      March 26, 2007, there were 31,097,500 shares of the registrant's Common Stock
      outstanding.









**TABLE
      OF CONTENTS**


ITEM
                  1.
              
              
              DESCRIPTION
                  OF BUSINESS
              
              
              1ITEM2.
              
              
              DESCRIPTION
                  OF PROPERTIES
              
              
              6ITEM3.
              
              
              LEGAL
                  PROCEEDINGS
              
              
              7ITEM4.
              
              
              SUBMISSION
                  OF MATTERS TO A VOTE OF SECURITY HOLDERS
              
              
              7PART
                  IIITEM5.
              
              
              MARKET
                  FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
              
              
              7ITEM6.
              
              
              MANAGEMENT'S
                  DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
              
              
              7ITEM7.
              
              
              FINANCIAL
                  STATEMENTS
              
              
              11ITEM8.
              
              
              CHANGES
                  IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                  AND FINANCIAL DISCLOSURES
              
              
              11ITEM8A.
              
              
              CONTROLS
                  AND PROCEDURES.
              
              
              11PART
                  IIIITEM9.
              
              
              DIRECTORS,
                  EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
                  WITH SECTION 16(A) OF THE EXCHANGE ACT
              
              
              11ITEM9A.
              
              
              CODE
                  OF ETHICS
              
              
              12ITEM10.
              
              
              EXECUTIVE
                  COMPENSATION
              
              
              12ITEM11.
              
              
              SECURITY
                  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT AND RELATED STOCKHOLDER MATTERS
              
              
              13ITEM12.
              
              
              CERTAIN
                  RELATIONSHIPS AND RELATED TRANSACTIONS, AND
                  DIRECTOR INDEPENDENCE
              
              
              14ITEM13.
              
              
              EXHIBITS
              
              
              15ITEM14.
              
              
              PRINCIPAL
                  ACCOUNTANT FEES AND SERVICES
              
              
              15SIGNATURES
              
              
              
              
              
              22










**Item
                1**
              **DESCRIPTION
                  OF BUSINESS**




***Overview
      of the Company and its Prior Strategy***




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.





As
      noted
      above, we anticipated that a critical competitive factor affecting our business
      was the level of insurance reimbursement and the accuracy of the diagnostic
      information provided by the device. With results
      showing over 90% sensitivity and specificity, we believed the CSD approaches
      the
      sensitivity and specificity of the gold standard for determining CAD, the
      angiogram. Unlike the angiogram, which is invasive and has a low risk of
      morbidity, the CSD is non-invasive and does not present a risk of
      morbidity.





Regardless
      of any perceived or actual benefits and advantages, our technologies and
      products may have been rendered obsolete or noncompetitive as a result of
      products introduced by competitors. Most of our competitors have substantially
      greater financial and technical resources, production and marketing capabilities
      and related experience. The greater resources, capabilities and experience
      of
      our competitors may have enabled them to develop, manufacture and market their
      products more successfully and at a lower cost. In addition, many of our
      competitors have significantly greater experience in conducting preclinical
      testing and clinical trials of medical devices and obtaining regulatory
      approvals. Accordingly, our competitors may succeed in obtaining FDA and related
      approvals for products more rapidly than we would have, which may give them
      an
      advantage in achieving market acceptance of their products.





Intellectual
      Property Matters





Where
      appropriate, intended to seek patent, trademark and other proprietary rights
      protection for the products and brands we were going to develop or introduce.
      In
      other cases, we were going to seek to license the rights to use the patents,
      trademarks and other proprietary rights of others in support of our business
      strategy, such as was the case with the Better Buns product and is currently
      the
      case with the CSD system.  However,
      there could be no assurance that patent, trademark and other proprietary rights
      would have been issued for any applications filed or that we would have been
      able to license such products and rights on terms acceptable to the Company,
      or
      at all. To date, neither the Company nor CBM has filed any applications or
      registrations for any patent, trademark and other proprietary
      rights.




4





In
      the
      case of the CSD system, CBM's agreement with its inventor required CBM to pay
      a
      royalty of five percent (5%) of the sale price for each device sold to a
      customer within the defined territory. The minimum royalty, beginning in 2006,
      was $250,000 per year, payable in installments every two months beginning on
      the
      last day of February 2006. No payment was made in February or March 2006. The
      license could have been cancelled at any time for failure to pay. The inventor
      also may license the product in the defined territory to up to two other
      companies with certain exceptions that expire beginning January 1, 2008. The
      CSD
      is protected under U.S. patents 6,148,228 and 6,638,232 and Copyright TXU
      856-320. All patents, copyrights and other intellectual property associated
      with
      this product are owned by Professor Dan Qun Fang. However, CBM has the right
      to
      register the CSD trademark in the event that Prof. Fang does not do so by
      December 31, 2006, although Prof. Fang will retain a non-exclusive right to
      its
      use.





Regulatory
      Matters





The
      FDA's
      Center for Devices and Radiological Health is responsible for regulating firms
      that manufacture, re-package, re- label, and/or import medical devices sold
      in
      the United States. The FDA classifies medical devices into Class I, II, and
      III,
      and regulatory control increases from Class I to Class III. The device
      classification regulation is critical, as it defines the regulatory requirements
      for a general device
      type. Most Class I devices are exempt from certain pre market notification
      requirements; most Class II devices require a "Pre market Notification" or
      510(k) filing; and most Class III devices require


"Pre
      market Approval."





Devices
      like the CSD are typically classified as Class II devices and require a pre
      market notification 510(k) filing. A 510(k) is a pre-marketing submission made
      to FDA to demonstrate that the device to be marketed
      is as safe and effective, that is, substantially equivalent, to a legally
      marketed device that is not subject to pre market approval. Applicants must
      compare their 510(k) device to one or more similar devices currently on the
      U.S.
      market and make and support their substantial equivalency claims. A legally
      marketed device includes those that have been found to be substantially
      equivalent to such a device through the 510(k) process. The legally marketed
      device(s) to which equivalence is drawn is known as the "predicate"
      device(s).





In
      order
      to obtain approval, applicants must submit descriptive data and, when necessary,
      performance data to establish that the device is substantially equivalent to
      a
      predicate device. Once approved, the basic regulatory
      requirements that manufacturers of medical devices distributed in the U.S.
      must
      comply with are:




*
      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.




5





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.





RESEARCH
      AND DEVELOPMENT





The
      Company did not invest in research and development for the Better Buns or any
      other fitness product. Through December 31, 2006, 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 & Gas, 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. We expect to purchase other working interests
      in
      oil and gas wells in the future.




The
      company intends to expand by acquiring additional working interests in other
      oil
      and gas wells. The company will also explore investments in other energy related
      enterprises.




**EMPLOYEES**




The
      Company currently employs one individual, Arthur Johnson, its sole director
      and
      officer. No compensation is currently being paid.




**ITEM
              2.**
            **DESCRIPTION
                OF PROPERTY**




Our
      principal office facility is presently located in space owned by our sole
      officer. During 2006, the Company recorded additional paid-in capital of $12,000
      for the fair value of rent contributed to the Company by its
      president.




6




**ITEM
              3.**
            **LEGAL
                PROCEEDINGS**




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




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




None.




**PART
      II.**




**ITEM
              5.**
            **MARKET
                FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
                ISSURER
                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
      March 31, 2006, there were 40 shareholders of record of our common stock and
      a
      total of 31,097,500 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.




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.**
            **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.




*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.*




7




**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
      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.




8




**EXPENSES
      AND RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2006**




**Statements
      of Operations Information**




**Year
                ended**
              **Dec.
                31, 2006**
            
            **Year
                Ended**
              **Dec.
                31, 2005**
            
            **For
                the Period**
              **May
                28, 2003**
              **(Inception)
                to**
              **Dec.
                31, 2006**Revenue
            
            $
            19,245
            
            $
            0
            
            $
            19,245Loss
                from continuing operations
            
            
            (70,336
            )
            
            (29,736
            )
            
            (100,072
            )Loss
                from discontinued operations
            
            
            (70,500
            )
            
            (1,667,253
            )
            
            (4,026,761
            )Loss
                from operations before income taxes
            
            
            (140,836
            )
            
            (1,696,989
            )
            
            (4,126,833
            )Net
                loss
            
            
            (140,836
            )
            
            (1,696,989
            )
            
            (4,126,833
            )Net
                loss per share basic and diluted:Continuing
                operations
            
            $
            -
            
            $
            -
            
            $
            -Discontinued
                operations
            
            
            -
            
            
            (.05
            )
            
            (.14
            )Total
            
            $
            -
            
            $
            (.05
            )
            $
            (.14
            )Weighted
                average number of shares outstanding during the period-basic and
                diluted
            
            
            31,729,290
            
            
            33,192,995
            
            
            29,154,865




**Balance
      Sheet Information**




**Dec.
                31, 2006**
            
            **Dec.
                31, 2005**Cash
            
            $
            0
            
            $
            1,698Total
                Assets
            
            
            274,442
            
            
            3,421Current
                Liabilities
            
            
            196,557
            
            
            278,927Total
                Liabilities
            
            
            196,557
            
            
            488,927Stockholders
                Equity (Deficiency)
            
            
            77,885
            
            
            (485,506
            )





With
      the
      exchange of ownership in CardioBioMedical Corporation with the original
      stockholders, the current and prior period operations of CardioBioMedical
      Corporation have been reclassified as discontinued operations.




Revenue
      reflects the Company’s share of income from its interest in the oil and gas
      lease beginning October 2006, when the well first became online. No revenue
      was
      recognized for December 2006 as the well was under repair.




Total
      operating expenses were $83,474 for the year ended December 31, 2006. These
      expenses consisted primarily of professional fees. The cost of the oil and
      gas
      lease is being amortized to expense over the period of estimated production.
      For
      the year ended December 31, 2006, amortization of $14,732 was recorded. The
      loss
      from continuing operations was $64,229.




Total
      assets consists primarily of the acquisition cost of the oil and gas lease
      of
      $165,000 plus the company’s share of additional development costs totaling
      $101,599. Total liabilities consist primarily of accounts payable of $110,641
      and amounts due to related party of $85,916. This related party funded operating
      and oil and gas well development costs.




9




**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
      company intends to expand by acquiring additional working interests in other
      oil
      and gas wells. The company will also explore investments in other energy related
      enterprises.




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.




Investment
      in Oil and Gas Leases. The Company follows the successful efforts method of
      accounting for its oil and gas operations. Under this method, all property
      acquisition costs and costs of exploratory and development wells are capitalized
      when incurred, pending determination of whether an individual well has found
      proved reserves. If it is determined that a well has not found proved reserves,
      the costs of drilling the well are expensed. The costs of development wells
      are
      capitalized whether productive or nonproductive. Geological and geophysical
      costs on exploratory prospects and the costs of carrying and retaining unproved
      properties are expensed as incurred. An impairment allowance is provided to
      the
      extent that capitalized costs of unproved properties, on a property-by property
      basis, are not considered to be realizable. Depletion, depreciation and
      amortization (“DD&A”) of capitalized costs of proved oil and gas properties
      is provided on a property- by property basis using the units of production
      method. The computation of DD&A takes into consideration dismantlement,
      restoration and abandonment costs and the anticipated proceeds from equipment
      salvage. The estimated dismantlement, restoration and abandonment costs are
      expected to be substantially offset by the estimated residual value of the
      lease
      and well equipment. An impairment loss is recorded if the net capitalized costs
      of proved oil and gas properties exceed the aggregate undiscounted future net
      revenues determined on a property-by-property basis. The impairment loss
      recognized equals the excess of net capitalized costs over the related fair
      value determined on a property-by-property basis.




Income
      Taxes. The Company accounts for income taxes under Statement of Financial
      Accounting Standards No. 109, Accounting for Income Taxes ("Statement 109").
      Under Statement 109, 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
      Statement 109, 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.




10




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 sole
      officer. Rent has not been charged for the office space, and it is not expected
      that rent will be charged in the near-term.




**ITEM
              7.**
            **FINANCIAL
                STATEMENTS.**




The
      company's financial statements for the fiscal year ended December 31, 2006
      are
      attached hereto, beginning on Page F-1.




**ITEM
              8.**
            **CHANGES
                IN AND DISAGREEMENTS WITH ACCOUNTANTS**




**None.**




**ITEM
              8A.**
            **CONTROLS
                AND PROCEDURES**




The
      company maintains disclosure controls and procedures (as defined in Rules
      13a-15(e) and 15d-15(e) promulgated under the Exchange Act) that are designed
      to
      ensure that information required to be disclosed in the company's Exchange
      Act
      reports is recorded, processed, summarized and reported within the time periods
      specified in the SEC's rules and forms, and that such information is accumulated
      and communicated to the company's management, including its Chief Executive
      Officer and Chief Financial Officer, as appropriate, to allow timely decisions
      regarding required disclosure.




Our
      Chief
      Executive Officer and Chief Financial Officer performed an evaluation of the
      effectiveness of the design and operation of the company's disclosure controls
      and procedures as of the end of the period covered by this quarterly report.
      Based upon that evaluation, the Chief Executive Officer and the Chief Financial
      Officer concluded that the company's disclosure controls and procedures were
      effective.




Such
      evaluation did not identify any change in the company's internal control over
      financial reporting during the year ended December 31, 2006 that has materially
      affected, or is reasonably likely to materially affect, the company's internal
      control over financial reporting.




**ITEM
              9.**
            **DIRECTORS,
                EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS**




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.




11




Beginning
      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 will serve as a director of the Company until the next annual
      meeting of stockholders and until his successor is elected and qualified or
      until his earlier resignation or removal.




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.




**ITEM
              9A.**
            **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.




**AUDIT
      COMMITTEE**




The
      Company currently does not have an audit committee; the sole director 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.




**ITEM
              10.**
            **EXECUTIVE
                COMPENSATION**




The
      Company has not paid or accrued any compensation to Mr. Arthur
      Johnson.




12




**OPTION
      AND LONG-TERM INCENTIVE PLANS**




The
      Company has maintained or currently maintains 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 director of the Company
      has not been and currently is not compensated for his services as director.




**EMPLOYMENT
      AND RELATED AGREEMENTS**




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




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




The
      following table shows, as of December 31, 2006, 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




**Name
                and Address of**
              **Beneficial
                Owners**
            
            **Amount
                and Nature of**
              **Beneficial
                Owner**(1)
            
            **Percent
                of**
              **Class**Centurion
                Gold Holdings, Inc.
              5005
                Riverway #
              Houston,
                TX 77056
            
            
            20,000,000
            
            
            64.3
            %Curtis
                Olschansky
              9700
                Via Emilie
              Boca
                Raton, FL 33428
            
            
            5,285,000
            
            
            17.0
            %All
                current directors and executive officers as a group
            
            
            0
            
            
            0.00
            %




(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, 2007 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.





13


The
      Company knows of no arrangement that may result in a change of control.




**ITEM
              12.**
            **CERTAIN
                RELATIONSHIPS AND RELATED TRANSACTIONS**




During
      2003, the Company issued 7,125,000 shares of common stock to its President
      for
      services with a fair value of $712,500.




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




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 5,000,000 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 16,500,000 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.




During
      2006, a related party advanced the Company an additional $81,387 in payment
      of
      operating an oil well development expenses. The advances are unsecured, bear
      interest at 10% per annum and are due on demand.




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.




14




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.




**ITEM
              13.**
            **EXHIBITS**




***EXHIBIT
      31.1 CEO AND CFO CERTIFICATION***




***EXHIBIT
      31.1 CEO AND CFO CERTIFICATION***




**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-KSB for the fiscal year ended December
      31 30, 2006 and for the review of quarterly financial statements included in
      Form 10-QSB for the quarters ended March 31, June 30 and September 30, 2006
      were
      $16,000.





The
      aggregate audit fees billed for professional services rendered for the audit
      of
      annual financial statements included in Form 10-KSB for the fiscal year ended
      December 31, 2005 and for the review of quarterly financial statements included
      in Form 10-QSB for the quarters ended March 31, June 30 and September 30, 2005
      were $20,503.





(B)
      Audit-Related Fees





None.





(C)
      Tax
      Fees





The
      aggregate fees billed in each of the last two fiscal years for professional
      services rendered by the principal accountants for tax compliance, tax advice,
      and tax planning were $400. The services comprising these fees were for the
      preparation of federal and state tax returns





(D)
      All
      Other Fees





None.




**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 100,000,000 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.




15




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.




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
      ASST.OB. High and low bid information for the Company's common stock is not
      currently available.




16




As
      of
      December 31, 2006, there were 40 shareholders of record of our common stock
      and
      a total of 31,097,500 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.




**LEGAL
      PROCEEDINGS**




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




**RECENT
      SALES OF UNREGISTERED SECURITIES**




None.




17




**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.




18




**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.




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.




**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%
      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 one member, Arthur
      Johnson.




19




**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.




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.




20


**ODYSSEY
        OIL & GAS, INC.**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 **FINANCIAL
        STATEMENTS**
 **AS
        OF DECEMBER 31, 2006**
 
 
  
 
 
 
 
 **ODYSSEY
        OIL & GAS, INC.**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 
 
 
 **CONTENTS**
 
 
 PAGE
              F-1
              REPORT
                  OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMPAGE
              F-2
              BALANCE
                  SHEET AS OF DECEMBER 31, 2006PAGE
              F-3
              STATEMENTS
                  OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 AND
                  FOR THE
                  PERIOD FROM MAY 28, 2003 (INCEPTION) TO DECEMBER 31,
                  2006PAGES
              F-4 -
                  F-6
              STATEMENT
                  OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE PERIOD FROM MAY 28, 2003
                  (INCEPTION) TO DECEMBER 31, 2006PAGES
              F-7
                  - F-8
              STATEMENTS
                  OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 AND
                  FOR THE
                  PERIOD FROM MAY 28, 2003 (INCEPTION) TO DECEMBER 31,
                  2006PAGES
              F-9
                  - F-18
              NOTES
                  TO FINANCIAL STATEMENTS
 
 
 
   **REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
 
 
 To
        the
        Board of Directors of:
 Odyssey
        Oil & Gas, Inc.
 
 We
        have
        audited the accompanying balance sheet of Odyssey Oil & Gas, Inc. (a
        development stage company) as of December 31, 2006, and the related
        statements of operations, changes in stockholders’ equity and cash flows for the
        years ended December 31, 2006 and 2005 and for the period from May 23, 2003
        (inception) to December 31, 2006. 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 audits 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 financial statements referred to above present fairly in all
        material respects, the financial position of Odyssey Oil & Gas, Inc. as of
        December 31, 2006 and the results of its operations and its cash flows for
        the
        years ended December 31, 2006 and 2005 and for the period from May 23, 2003
        (inception) to December 31, 2006 in conformity with accounting principles
        generally accepted in the United States of America.
 
 The
        accompanying financial statements have been prepared assuming that the Company
        will continue as a going concern. As discussed in Note 8 to the financial
        statements, the Company is in the development stage with an accumulated deficit
        of $381,241, a
        working
        capital deficiency of $188,714 and a negative cash flow from operations of
        $1,007,565 from 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 8. The financial statements do not include any adjustments that might
        result from the outcome of this uncertainty.
 
 
 
 WEBB
        & COMPANY, P.A.
 
 Boynton
        Beach, Florida
 March
        5,
        2007
 
 
 
  **ODYSSEY
          OIL & GAS, INC.**
 **(A
          DEVELOPMENT STAGE COMPANY)**
 **BALANCE
          SHEET**
 **AS
          OF DECEMBER 31, 2006**
 
 **ASSETS****CURRENT
                  ASSETS**Accounts
                  receivable, net
              
              $
              7,843**INVESTMENT
                  IN OIL AND GAS LEASES - NET**
              
              
              266,599**TOTAL
                  ASSETS**
              
              $
              274,442**LIABILITIES
                  AND STOCKHOLDERS’ EQUITY****CURRENT
                  LIABILITIES**Accounts
                  payable and accrued expenses
              
              $
              110,641Loans
                  payable and accrued interest - related parties
              
              
              85,916Total
                  Current Liabilities
              
              
              196,557**STOCKHOLDERS’
                  EQUITY**Preferred
                  stock, $0.0001 par value, 20,000,000 shares authorized, none issued
                  and
                  outstanding
              
              
              -Common
                  stock, $0.0001 par value, 100,000,000 shares authorized, 31,097,500
                  shares
                  issued and outstanding
              
              
              3,110Additional
                  paid-in capital
              
              
              456,016Accumulated
                  deficit during development stage
              
              
              (381,241
              )Total
                  Stockholders’ Equity
              
              
              77,885**TOTAL
                  LIABILITIES AND STOCKHOLDERS’ EQUITY**
              
              $
              274,442
 
 
 See
        accompanying notes to financial statements.
  F-2
 **ODYSSEY
          OIL & GAS, INC.**
 **(A
          DEVELOPMENT STAGE COMPANY)**
 **STATEMENTS
          OF OPERATIONS**
  For
                  The Year Ended
                December
                  31,
                2006
              
              For
                  The Year Ended
                December
                  31,
                2005
              
              For
                  The Period From
                May
                  28, 2003
                (Inception)
                  To
                December
                  31,
                2006**REVENUE**
              
              $
              19,245
              
              $
              -
              
              $
              19,245**OPERATING
                  EXPENSES**General
                  and administrative
              
              
              24,876
              
              
              3,259
              
              
              28,135Professional
                  fees
              
              
              43,866
              
              
              27,071
              
              
              70,937Amortization
              
              
              14,732
              
              
              -
              
              
              14,732Total
                  Operating Expenses
              
              
              83,474
              
              
              30,330
              
              
              113,804**LOSS
                  FROM CONTINUING OPERATIONS**
              
              
              (64,229
              )
              
              (30,330
              )
              
              (94,559
              )**OTHER
                  INCOME AND (EXPENSE)**Interest
                  income
              
              
              -
              
              
              2,789
              
              
              2,789Interest
                  expense
              
              
              (6,107
              )
              
              (2,195
              )
              
              (8,302
              )Total
                  Other Income and (Expense)
              
              
              (6,107
              )
              
              594
              
              
              (5,513
              )**LOSS
                  FROM CONTINUING OPERATIONS BEFORE INCOME TAXES**
              
              
              (70,336
              )
              
              (29,736
              )
              
              (100,072
              )Provision
                  for Income Taxes
              
              
              -
              
              
              -
              
              
              -**LOSS
                  FROM CONTINUING OPERATIONS**
              
              
              (70,336
              )
              
              (29,736
              )
              
              (100,072
              )**LOSS
                  FROM DISCONTINUED OPERATIONS**
              
              
              (70,500
              )
              
              (1,667,253
              )
              
              (4,026,761
              )**NET
                  LOSS**
              
              $
              (140,836
              )
              $
              (1,696,989
              )
              $
              (4,126,833
              )**NET
                  LOSS PER SHARE - BASIC AND DILUTED**Continuing
                  operations
              
              $
              -
              
              $
              -
              
              $
              -Discontinued
                  operations
              
              
              -
              
              
              (.05
              )
              
              (.14
              )$
              -
              
              $
              (.05
              )
              $
              (.14
              )Weighted
                  average number of shares outstanding during the period - basic
                  and
                  diluted
              
              
              31,729,290
              
              
              33,192,995
              
              
              29,154,865
 
 See
        accompanying notes to financial statements.
  F-3
 **ODYSSEY
        OIL & GAS, INC.**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 **STATEMENT
        OF STOCKHOLDERS’ EQUITY**
 **FOR
        THE PERIOD FROM MAY 28, 2003 (INCEPTION) TO DECEMBER 31,
        2006**
  Preferred
                  Stock
              
              Common
                  Stock
              
              Additional
                  Paid-In
              
              Accumulated
                  Deficit During DevelopmentShares
              
              Amount
              
              Shares
              
              Amount
              
              Capital
              
              Stage
              
              TotalCommon
                  stock issued to founders for cash ($0.10 per share)
              
              
              -
              
              $
              -
              
              
              2,500
              
              $
              1
              
              $
              249
              
              $
              -
              
              $
              250Common
                  stock issued for license ($0.10 per share)
              
              
              -
              
              
              -
              
              
              16,500,000
              
              
              1,650
              
              
              1,648,350
              
              
              -
              
              
              1,650,000Common
                  stock issued to officer as compensation ($0.10 per share)
              
              
              -
              
              
              -
              
              
              7,125,000
              
              
              712
              
              
              711,788
              
              
              -
              
              
              712,500Common
                  stock issued for cash ($0.10 per share)
              
              
              -
              
              
              -
              
              
              800,000
              
              
              80
              
              
              79,920
              
              
              -
              
              
              80,000Common
                  stock issued for cash ($0.45 per share)
              
              
              -
              
              
              -
              
              
              277,778
              
              
              28
              
              
              124,972
              
              
              -
              
              
              125,000Common
                  stock issued to consultant for services ($0.10 per share)
              
              
              -
              
              
              -
              
              
              8,200,000
              
              
              820
              
              
              819,180
              
              
              -
              
              
              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
              
              
              -
              
              
              -
              
              
              32,905,278
              
              
              3,292
              
              
              3,384,459
              
              
              (1,737,805
              )
              
              1,649,945
 
 See
        accompanying notes to financial statements.
  F-4
 
  **ODYSSEY
            OIL & GAS, INC.**
 **(A
            DEVELOPMENT STAGE COMPANY)**
 **STATEMENT
            OF STOCKHOLDERS’ EQUITY**
 **FOR
            THE PERIOD FROM MAY 28, 2003 (INCEPTION) TO DECEMBER 31,
            2006**
 Preferred
                  Stock
              
              Common
                  Stock
              
              Additional
                  Paid-In
              
              Accumulated
                  Deficit During DevelopmentShares
              
              Amount
              
              Shares
              
              Amount
              
              Capital
              
              Stage
              
              TotalCommon
                  stock issued for cash ($0.45 per share)
              
              
              -
              
              
              -
              
              
              672,231
              
              
              67
              
              
              302,436
              
              
              -
              
              
              302,503Net
                  loss, 2004
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (551,203
              )
              
              (551,203
              )Balance,
                  December 31, 2004
              
              
              -
              
              
              -
              
              
              33,577,509
              
              
              3,358
              
              
              3,686,895
              
              
              (2,289,008
              )
              
              1,401,245Stock
                  issued in reverse merger
              
              
              -
              
              
              -
              
              
              11,097,500
              
              
              1,110
              
              
              (1,110
              )
              
              -
              
              
              -Shares
                  issued to officer for services
              
              
              -
              
              
              -
              
              
              5,000,000
              
              
              500
              
              
              149,500
              
              
              -
              
              
              150,000Shares
                  cancelled related to license rights
              
              
              -
              
              
              -
              
              
              (16,500,000
              )
              
              (1,650
              )
              
              (493,350
              )
              
              -
              
              
              (495,000
              )In-kind
                  contribution
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              12,000
              
              
              -
              
              
              12,000Warrants
                  issued for license
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              143,238
              
              
              -
              
              
              143,238Net
                  loss, 2005
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,696,989
              )
              
              (1,696,989
              )Balance,
                  December 31, 2005
              
              
              -
              
              
              -
              
              
              33,175,009
              
              
              3,318
              
              
              3,497,173
              
              
              (3,985,997
              )
              
              (485,506
              )
 
 See
        accompanying notes to financial statements.
  F-5
 
  **ODYSSEY
            OIL & GAS, INC.**
 **(A
            DEVELOPMENT STAGE COMPANY)**
 **STATEMENT
            OF STOCKHOLDERS’ EQUITY**
 **FOR
            THE PERIOD FROM MAY 28, 2003 (INCEPTION) TO DECEMBER 31,
            2006**
 Preferred
                  Stock
              
              Common
                  Stock
              
              Additional
                  Paid-In
              
              Accumulated
                  Deficit During DevelopmentShares
              
              Amount
              
              Shares
              
              Amount
              
              Capital
              
              Stage
              
              TotalIn-kind
                  contribution
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              12,000
              
              
              -
              
              
              12,000Common
                  stock cancelled in connection with exchange of ownership in
                  CardioBioMedical Corporation to its original stockholders
              
              
              -
              
              
              -
              
              
              (22,077,509
              )
              
              (2,208
              )
              
              (3,216,157
              )
              
              3,745,592
              
              
              527,227Common
                  stock issued to purchase investment in oil and gas leases ($.008
                  per
                  share)
              
              
              -
              
              
              -
              
              
              20,000,000
              
              
              2,000
              
              
              163,000
              
              
              -
              
              
              165,000Net
                  loss, 2006
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (140,836
              )
              
              (140,836
              )**BALANCE,**
                **DECEMBER 31, 2006**
              
              
              -
              
              $
              -
              
              
              31,097,500
              
              $
              3,110
              
              $
              456,016
              
              $
              (381,241
              )
              $
              77,885
  
 See
        accompanying notes to financial statements.
  F-6
  **ODYSSEY
          OIL & GAS, INC.**
 **(A
          DEVELOPMENT STAGE COMPANY)**
 **STATEMENTS
          OF CASH FLOWS**
 For
                  The Year Ended
                December
                  31,
                2006
              
              For
                  The Year Ended
                December
                  31,
                2005
              
              For
                  The Period From
                May
                  28, 2003
                (Inception)
                  To
                December
                  31,
                2006**CASH
                  FLOWS FROM OPERATING ACTIVITIES:**Net
                  loss
              
              $
              (140,836
              )
              $
              (1,696,989
              )
              $
              (4,126,833
              )Net
                  loss from discontinued operations
              
              
              (70,500
              )
              
              (1,667,253
              )
              
              (4,026,761
              )Loss
                  from continuing operations
              
              
              (70,336
              )
              
              (29,736
              )
              
              (100,072
              )Adjustments
                  to reconcile net loss to net cash provided by (used in) operating
                  activities:In
                  kind contribution
              
              
              9,000
              
              
              -
              
              
              9,000Amortization
              
              
              14,732
              
              
              -
              
              
              14,732Changes
                  in operating assets and liabilities:Increase
                  in accounts receivable
              
              
              (7,843
              )
              
              -
              
              
              (7,843
              )Increase
                  in accounts payable and accrued expenses
              
              
              155,802
              
              
              -
              
              
              110,641Cash
                  flows from operating activities in continuing operations
              
              
              161,355
              
              
              (29,736
              )
              
              26,458Cash
                  flows from operating activities in discontinued operations
              
              
              (7,568
              )
              
              (16,668
              )
              
              (1,034,023
              )Net
                  Cash Provided By (Used In) Operating Activities
              
              
              93,787
              
              
              (46,404
              )
              
              (1,007,565
              )**CASH
                  FLOWS FROM INVESTING ACTIVITIES:**Purchase
                  of property and equipment
              
              
              (116,331
              )
              
              -
              
              
              (116,331
              )Cash
                  flows from investing activities in continuing operations
              
              
              (116,331
              )
              
              -
              
              
              (116,331
              )Cash
                  flows from investing activities in discontinued operations
              
              
              -
              
              
              -
              
              
              -Net
                  Cash Used In Investing Activities
              
              
              (116,331
              )
              
              -
              
              
              (116,331
              )**CASH
                  FLOWS FROM FINANCING ACTIVITIES:**Repayment
                  of stockholder loans
              
              
              (609
              )
              
              -
              
              
              (609
              )Loans
                  payable - related parties
              
              
              81,387
              
              
              -
              
              
              81,387Cash
                  flows from investing activities in continuing operations
              
              
              80,778
              
              
              -
              
              
              80,778Cash
                  flows from investing activities in discontinued operations
              
              
              (59,932
              )
              
              -
              
              
              1,043,118Net
                  Cash Provided By Financing Activities
              
              
              20,846
              
              
              -
              
              
              1,123,896NET
                  (DECREASE) IN CASH
              
              
              (1,698
              )
              
              (46,404
              )
              
              -CASH
                  AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
              
              
              1,698
              
              
              48,102
              
              
              -CASH
                  AND CASH EQUIVALENTS AT END OF PERIOD
              
              $
              -
              
              $
              1,698
              
              $
              -
 **SUPPLEMENTAL
                  DISCLOSURE OF CASH FLOW
                  INFORMATION:**
 Cash
                  paid for income taxes
              
              $
              456
              
              $
              -
              
              $
              1,368Cash
                  paid for interest
              
              $
              -
              
              $
              -
              
              $
              -
 
 See
        accompanying notes to financial statements.
  F-7
 **ODYSSEY
          OIL & GAS, INC.**
 **(A
          DEVELOPMENT STAGE COMPANY)**
 **STATEMENTS
          OF CASH FLOWS**
 **SUPPLEMENTAL
        DISCLOSURE OF NON-CASH INVESTING AND FINANCING
        ACTIVITIES:**
 
 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 from a related
        public company.
 
 On
        April
        21, 2006, the Company exchanged all of its ownership in CardioBioMedical
        Corporation to the original stockholders for 22,077,509 common shares of
        Odyssey
        and the warrant issued to purchase 6,500,000 shares of the Company’s common
        stock was cancelled.
 
 During
        2003, the Company issued 16,500,000 shares of common stock with a fair value
        of
        $1,650,000 for the license rights to the bio-cybernetic technology and frequency
        analysis technology.
 
 During
        2005, the Company cancelled 16,500,000 shares of common stock with a fair
        value
        of $495,000 for the termination of the exclusive rights to the bio-cybernetic
        technology and frequency analysis technology.
 
 During
        2005, the Company issued warrants to purchase 6,500,000 of its common shares
        at
        $0.01 for the non-exclusive rights to the bio-cybernetic technology and
        frequency analysis technology valued at $143,238.
        See
          accompanying notes to financial statements.
 F-8
 **ODYSSEY
              OIL & GAS, INC.**
 **(A
              DEVELOPMENT STAGE COMPANY)**
 **NOTES
              TO FINANCIAL STATEMENTS**
 **AS
              OF DECEMBER 31, 2006**
   **NOTE
        1****SUMMARY
        OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION**
 
 ***(A)
        Organization and Basis of Presentation***
 
 Odyssey
        Oil & Gas, Inc. (F/K/A Advanced Sports Technologies, Inc.) is a Florida
        corporation incorporated on August 9, 2001. Currently, the Company owns and
        derives revenue from its 10% working interest in oil and gas leases located
        in
        Texas.
 
 On
        April
        21, 2006, the ownership of CardioBioMedical Corporation was exchanged for
        22,077,509 shares of Odyssey common stock to the original stockholders.
        Accordingly, all current and prior period 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.
 
 The
        financial statements for 2006 include the accounts of Odyssey Oil & Gas,
        Inc. (F/K/A Advanced Sports Technologies, Inc.) and CardioBioMedical Corporation
        (a development stage company) through the date of exchange on April 21, 2006.
        The financial statements for 2005 include the accounts of Odyssey Oil & Gas,
        Inc. and CardioBioMedical Corporation. All intercompany accounts during periods
        of consolidation have been eliminated.
 
 Odyssey
        Oil & Gas, Inc. (F/K/A Advanced Sports Technologies, Inc.) is hereafter
        referred to as the “Company.”
 
 As
        a
        result of the transactions referred to in Note 4(D), Centurion Gold Holdings,
        Inc., a related public company, owns approximately 64% of the
        Company.
 
 ***(B)
        Investment in Oil and Gas Leases***
 
 The
        Company follows the successful efforts method of accounting for its oil and
        gas
        operations. Under this method, all property acquisition costs and costs of
        exploratory and development wells are capitalized when incurred, pending
        determination of whether an individual well has found proved reserves. If
        it is
        determined that a well has not found **** proved
        reserves, the costs of drilling the well are expensed. The costs of development
        wells are capitalized whether productive or nonproductive. Geological and
        geophysical costs on exploratory prospects and the costs of carrying and
        retaining unproved properties are expensed as incurred. An impairment allowance
        is provided to the extent that capitalized costs of unproved properties,
        on a
        property-by property basis, are not considered to be realizable. Depletion,
        depreciation and amortization (“DD&A”) of capitalized costs of proved oil
        and gas properties is provided on a property- by property basis using the
        units
        of production method. The computation of DD&A takes into consideration
        dismantlement, restoration and abandonment costs and the anticipated proceeds
        from equipment salvage. The estimated dismantlement, restoration and abandonment
        costs are expected to be substantially offset by the estimated residual value
        of
        the lease and well equipment. An impairment loss is recorded if the net
        capitalized costs of proved oil and gas properties exceed the aggregate
        undiscounted future net revenues determined on a property-by-property basis.
        The
        impairment loss recognized equals the excess of net capitalized costs over
        the
        related fair value determined on a property-by-property basis.
 F-9
 **ODYSSEY
                OIL & GAS, INC.**
 **(A
                DEVELOPMENT STAGE COMPANY)**
 **NOTES
                TO FINANCIAL STATEMENTS**
 **AS
                OF DECEMBER 31, 2006**
 
 ***(C)
        Fair Value of Financial Instruments***
 
 The
        carrying amounts of the Company’s financial instruments including accounts
        payable and loans payable - related parties approximate fair value due to
        the
        relatively short period to maturity for these instruments.
 
 ***(D)
        Revenue Recognition***
 
 Revenue
        from its interest in the oil and gas leases is recognized when production
        is
        sold to a purchaser at a fixed or determinable price, when delivery has occurred
        and title has transferred and if collectibility of the revenue is
        probable.
 
 ***(E)
        Income Taxes***
 
 The
        Company accounts for income taxes under the Statement of Financial Accounting
        Standards No. 109, “Accounting for Income Taxes” (“Statement 109”). Under
        Statement 109, 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 Statement 109,
        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.
 
 ***(F)
        Loss Per Share***
 
 Basic
        and
        diluted net loss per common share is computed based upon the weighted average
        common shares outstanding as defined by Financial Accounting Standards No.
        128,
“Earnings Per Share.” As of December 31, 2006 and 2005, there were 0 and
        6,500,000 warrants, respectively outstanding that were not included in dilutive
        net loss per share as the effect was anti-dilutive.
 
 ***(G)
        Asset Retirement Obligations***
 
 The
        Company’s asset retirement obligations arise from the plugging and abandonment
        liabilities for its oil and gas wells. As of December 31, 2006, the Company
        estimates that its share of oil and gas well retirement obligations will
        not be
        material at the end of the life of the well and has not accrued any future
        liability as of December 31, 2006.
 F-10
 **ODYSSEY
                OIL & GAS, INC.**
 **(A
                DEVELOPMENT STAGE COMPANY)**
 **NOTES
                TO FINANCIAL STATEMENTS**
 **AS
                OF DECEMBER 31, 2006**
 ***(H)
        Statement of Cash Flows***
 
 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.
 
 ***(I)
        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.
 
 ***(*** ***J)
        Recent Accounting Pronouncements***
 
 In
        February 2006, the FASB issued SFAS No. 155, " *Accounting
        for Certain Hybrid Financial Instruments-an amendment of FASB Statements
        No. 133
        and 140* ",
        to
        simplify and make more consistent the accounting for certain financial
        instruments. SFAS No. 155 amends SFAS No. 133, " *Accounting
        for Derivative Instruments and Hedging Activities* ",
        to
        permit fair value re-measurement for any hybrid financial instrument with
        an
        embedded derivative that otherwise would require bifurcation, provided that
        the
        whole instrument is accounted for on a fair value basis. SFAS No. 155 amends
        SFAS No. 140, " *Accounting
        for the Impairment or Disposal of Long-Lived Assets* ",
        to
        allow a qualifying special-purpose entity to hold a derivative financial
        instrument that pertains to a beneficial interest other than another derivative
        financial instrument. SFAS No. 155 applies to all financial instruments acquired
        or issued after the beginning of an entity's first fiscal year that begins
        after
        September 15, 2006, with earlier application allowed. The adoption of this
        statement is not expected to have a material effect on the Company's future
        reported financial position or results of operations.
 
 In
        March
        2006, the FASB issued SFAS No. 156, " *Accounting
        for Servicing of Financial Assets, an amendment of FASB Statement No. 140,
        Accounting for Transfers and Servicing of Financial Assets and Extinguishments
        of Liabilities* ".
        This
        statement requires all separately recognized servicing assets and servicing
        liabilities be initially measured at fair value, if practicable, and permits
        for
        subsequent measurement using either fair value measurement with changes in
        fair
        value reflected in earnings or the amortization and impairment requirements
        of
        Statement No. 140. The subsequent measurement of separately recognized servicing
        assets and servicing liabilities at fair value eliminates the necessity for
        entities that manage the risks inherent in servicing assets and servicing
        liabilities with derivatives to qualify for hedge accounting treatment and
        eliminates the characterization of declines in fair value as impairments
        or
        direct write-downs. SFAS No. 156 is effective for an entity's first fiscal
        year
        beginning after September 15, 2006. The adoption of this statement is not
        expected to have a material effect on the Company's future reported financial
        position or results of operations.
 F-11
 **ODYSSEY
                OIL & GAS, INC.**
 **(A
                DEVELOPMENT STAGE COMPANY)**
 **NOTES
                TO FINANCIAL STATEMENTS**
 **AS
                OF DECEMBER 31,
                2006**
 In
        June
        2006, the FASB issued FASB Interpretation No. 48, *“Accounting
        for Uncertainty in Income Taxes, an interpretation of FASB Statements No.
        109”* .
        FIN 48
        clarifies the accounting for uncertainty in income taxes by prescribing a
        two-step method of first evaluating whether a tax position has met a more
        likely
        than not recognition threshold and second, measuring that tax position to
        determine the amount of benefit to be recognized in the financial statements.
        FIN 48 provides guidance on the presentation of such positions within a
        classified statement of financial position as well as on derecognition, interest
        and penalties, accounting in interim periods, disclosure, and transition.
        FIN 48
        is effective for fiscal years beginning after December 15, 2006. The adoption
        of
        this statement is not expected to have a material effect on the Company's
        future
        reported financial position or results of operations.
 
 In
        September 2006, the FASB issued SFAS No. 157, “ *Fair
        Value Measurements* ”.
        The
        objective of SFAS 157 is to increase consistency and comparability in fair
        value
        measurements and to expand disclosures about fair value measurements. SFAS
        157
        defines fair value, establishes a framework for measuring fair value in
        generally accepted accounting principles, and expands disclosures about fair
        value measurements. SFAS 157 applies under other accounting pronouncements
        that
        require or permit fair value measurements and does not require any new fair
        value measurements. The provisions of SFAS No. 157 are effective for fair
        value
        measurements made in fiscal years beginning after November 15, 2007. The
        adoption of this statement is not expected to have a material effect on the
        Company's future reported financial position or results of
        operations.
 
 In
        September 2006, the FASB issued SFAS No. 158, “ *Employers’
        Accounting for Defined Benefit Pension and Other Postretirement Plans - an
        amendment of FASB Statements No. 87, 88, 106, and 132(R)* ”.
        This
        statement requires employers to recognize the over-funded or under-funded
        status
        of a defined benefit postretirement plan (other than a multiemployer plan)
        as an
        asset or liability in its statement of financial position and to recognize
        changes in that funded status in the year in which the changes occur through
        comprehensive income of a business entity or changes in unrestricted net
        assets
        of a not-for-profit organization. This statement also requires an employer
        to
        measure the funded status of a plan as of the date of its year-end statement
        of
        financial position, with limited exceptions. The provisions of SFAS No. 158
        are
        effective for employers with publicly traded equity securities as of the
        end of
        the fiscal year ending after December 15, 2006. The adoption of this statement
        is not expected to have a material effect on the Company's future reported
        financial position or results of operations.
 F-12
 **ODYSSEY
                OIL & GAS, INC.**
 **(A
                DEVELOPMENT STAGE COMPANY)**
 **NOTES
                TO FINANCIAL STATEMENTS**
 **AS
                OF DECEMBER 31,
                2006**
 In
        September 2006, the SEC issued Staff Accounting Bulletin (“SAB”) No. 108,
“ *Considering
        the Effects of Prior Year Misstatements when Quantifying Misstatements in
        Current Year Financial Statements* .”
SAB
        No. 108 addresses how the effects of prior year uncorrected misstatements
        should
        be considered when quantifying misstatements in current year financial
        statements. SAB No. 108 requires companies to quantify misstatements using
        a
        balance sheet and income statement approach and to evaluate whether either
        approach results in quantifying an error that is material in light of relevant
        quantitative an qualitative factors. SAB No. 108 is effective for period
        ending
        after November 15, 2006. The Company is currently evaluating the impact of
        adopting SAB No. 108 but does not expect that it will have a material effect
        on
        its financial statements.
 
 In
        February 2007, the Financial Accounting Standards Board (FASB) issued SFAS
        No.
        159, “ *The
        Fair Value Option for Financial Assets and Financial Liabilities - Including
        an
        Amendment of FASB Statement No. 115* ”.
        This
        statement permits entities to choose to measure many financial instruments
        and
        certain other items at fair value. Most of the provisions of SFAS No. 159
        apply
        only to entities that elect the fair value option. However, the amendment
        to
        SFAS No. 115 “ *Accounting
        for Certain Investments in Debt and Equity Securities* ”
applies
        to all entities with available-for-sale and trading securities. SFAS No.
        159 is
        effective as of the beginning of an entity’s first fiscal year that begins after
        November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
        year that begins on or before November 15, 2007, provided the entity also
        elects
        to apply the provision of SFAS No. 157, “ *Fair
        Value Measurements”.* The
        adoption of this statement is not expected to have a material effect on the
        Company's financial statements.
 
 **NOTE
        2****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 is being accounted for under the cost method
        of
        accounting. During the year ended December 31, 2006, an additional $128,886
        was
        incurred for the Company’s share of oil well development costs of which $58,229
        was paid by related parties (See Note 3).
 
 The
        Company accounts for any impairment in accordance with Statement of Financial
        Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (“Statement
        142”). Under Statement 142, intangible assets are reviewed for evidence or
        changes in circumstances that indicate that their carrying value may not
        be
        recoverable. The Company periodically reviews the carrying value to determine
        whether or not an impairment to such value has occurred. As of December 31,
        2006, no impairment was recognized.
 
 The
        investment in oil and gas leases is recorded net of accumulated amortization
        of
        $14,732.
  F-13
 **ODYSSEY
              OIL & GAS, INC.**
 **(A
              DEVELOPMENT STAGE COMPANY)**
 **NOTES
              TO FINANCIAL STATEMENTS**
 **AS
              OF DECEMBER 31, 2006**
 
 **NOTE
        3****LOANS
        PAYABLE - RELATED PARTIES**
 
 During
        the year ended December 31, 2006, Centurion Gold Holdings, Inc. advanced
        the
        Company an additional $58,229 and a third party advanced an additional $23,158
        in payment of operating and oil well development expenses. The advances are
        unsecured, bear interest at 10% per annum and are due on demand. Loans payable
        -
        related parties include accrued interest of $5,138.
 
 **NOTE
        4****STOCKHOLDERS’
        EQUITY**
 
 ***(A)
        Common Stock Issued for Cash***
 
 During
        2003, the Company issued 2,500 shares of common stock to its founder for
        cash of
        $250 ($0.10 per share).
 
 During
        2003, the Company issued 800,000 shares of common stock for cash of $80,000
        ($0.10 per share).
 
 During
        2003, the Company issued 277,778 shares of common stock for cash of $125,000
        ($0.45 per share).
 
 During
        2004, the Company issued 672,231 shares of common stock for cash of $302,503
        ($0.45 per share).
 
 During
        2005, the Company issued 11,097,500 shares of common stock to the stockholders
        of Advanced Sports upon completion of the merger.
 
 ***(B)
        Common Stock Issued for Services***
 
 During
        2003, the Company issued 7,125,000 shares of common stock for officer
        compensation valued for financial accounting purposes at $712,500 ($0.10 per
        share) based upon recent cash offering prices. The initial 2,500 shares issued
        upon formation of the corporation were purchased for $.10 per
        share.
 
 During
        2003, the Company issued 16,500,000 shares of common stock for licensing
        rights
        valued for financial accounting purposes at $1,650,000 ($0.10 per share,
        the
        price paid for the initial 2,500 shares issued upon formation of the
        corporation) based upon recent cash offering prices. During 2005, these
        16,500,000 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 6,500,000 common shares at $ .01 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 SFAS 123 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.
 F-14
 **ODYSSEY
                OIL & GAS, INC.**
 **(A
                DEVELOPMENT STAGE COMPANY)**
 **NOTES
                TO FINANCIAL STATEMENTS**
 **AS
                OF DECEMBER 31, 2006**
 During
        2003, the Company issued 8,200,000 shares of common stock for consulting
        services valued for financial accounting purposes at $820,000 ($0.10 per
        share)
        based upon recent cash offering prices.
 
 During
        2005, the Company issued 5,000,000 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.
 
 ***(C)
        In-Kind Contribution***
 
 During
        2006, the Company recorded additional paid-in capital of $12,000 for the
        fair
        value of rent contributed to the Company by its president.
 
 During
        2005, the Company recorded additional paid-in capital of $12,000 for the
        fair
        value of rent 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 22,077,509 common shares of
        Odyssey
        and the warrant issued to purchase 6,500,000 shares of the Company’s common
        stock was cancelled based on the book value of assets and liabilities on
        the
        date of exchange (See Note 7).
 
 On
        April
        21, 2006, the Company issued 20 million shares of common stock to purchase
        a 10%
        working interest in certain gas and oil leases in Texas for $165,000 ($.008
        per
        share) from Centurion Gold Holdings, Inc., a related public company (See
        Note
        2).
 
 **NOTE
        5****RELATED
        PARTY TRANSACTIONS**
 
 During
        2005, the Company settled a dispute with a related party. The settlement
        agreement called for the related party to return 16,500,000 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 (included in discontinued
        operations).
 
 See
        also
        Notes 2, 3 and 4.
 F-15
 **ODYSSEY
                OIL & GAS, INC.**
 **(A
                DEVELOPMENT STAGE COMPANY)**
 **NOTES
                TO FINANCIAL STATEMENTS**
 **AS
                OF DECEMBER 31, 2006**
   **NOTE
        6****INCOME
        TAXES**
 
 Income
        tax expense (benefit) for the periods ended December 31, 2006 and 2005 is
        summarized as follows:
 
 2006
              
              2005Current: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, 2006 and 2005 as follows:
 
 2006
              
              2005U.S.
                  Federal income tax expense (benefit)
              
              $
              (47,884
              )
              $
              (576,976
              )State
                  income tax expense (benefit)
              
              
              (5,112
              )
              
              -Permanent
                  difference
              
              
              31,045
              
              
              366,428Effect
                  on net operating loss carryforward
              
              
              21,952
              
              
              210,548$
              -
              
              $
              -
 
 The
        tax
        effects of temporary differences that give rise to significant portions of
        deferred tax assets and liabilities at December 31, 2006 and 2005 are as
        follows:
 
 2006
              
              2005Deferred
                  tax assets:Net
                  operating loss carryforward
              
              $
              21,952
              
              $
              210,548Total
                  gross deferred tax assets
              
              
              21,952
              
              
              210,548Less
                  valuation allowance
              
              
              21,952
              
              
              210,548Net
                  deferred tax assets
              
              $
              -
              
              $
              -
 
 At
        December 31, 2006, the Company had a net operating loss carryforward of
        approximately $58,300 for U.S. Federal income tax purposes available to offset
        future taxable income expiring through 2026. 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, 2006 was an increase of
        $21,952.
 F-16
 **ODYSSEY
                OIL & GAS, INC.**
 **(A
                DEVELOPMENT STAGE COMPANY)**
 **NOTES
                TO FINANCIAL STATEMENTS**
 **AS
                OF DECEMBER 31, 2006**
   **NOTE
        7****DISCONTINUED
        OPERATIONS**
 
 On
        April
        21, 2006, the ownership of CardioBioMedical Corporation was exchanged for
        22,077,509 shares of Odyssey common stock to the original stockholders.
        Accordingly, all current and prior period amounts relating to the operations
        of
        CardioBioMedical Corporation have been reclassified to conform to this
        presentation. 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 for the period January 1, 2006 to April 21, 2006, the date of
        exchange.
 
 **NOTE
        8****GOING
        CONCERN**
 
 As
        reflected in the accompanying financial statements, the Company is in the
        development stage with an accumulated deficit of $381,241, a working capital
        deficiency of $188,714 and a negative cash flow from operations of $1,007,565
        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.
 
 On
        April
        21, 2006, the Company acquired a 10% working interest in certain gas and
        oil
        leases in Texas. The Company’s portion of the capital requirement to finish and
        repair the well was $128,886. This capital requirement was and will be funded
        by
        related parties (See Note 3). Management anticipates the well will produce
        sufficient cash flow to ensure the Company will continue as a going
        concern.
 
 **NOTE
            9****INFORMATION
            REGARDING PROVED OIL AND GAS RESERVES
            (UNAUDITED)**
 
 Proved
        oil and gas reserves are the estimated quantities of crude oil, natural gas,
        and
        natural gas liquids which geological and engineering data demonstrate with
        reasonable certainty to be recoverable in future years form known reservoirs
        under existing economic and operating conditions, i.e. prices and costs as
        of
        the date the estimate is made. Prices include consideration of changes in
        existing prices provided only by contractual arrangements, but not on
        escalations based upon future conditions.
 
 Proved
        developed oil and gas reserves are reserves that can be expected to be recovered
        through existing wells with existing equipment and operating methods. Additional
        oil and gas expected to be obtained through the application of fluid injection
        or other improved recovery techniques for supplementing the natural forces
        and
        mechanisms of primary recovery should be included as “proved developed reserves”
only after testing by a pilot project or after the operation of an installed
        program has confirmed through production response that increased recovery
        will
        be achieved.
 F-17
 **ODYSSEY
                OIL & GAS, INC.**
 **(A
                DEVELOPMENT STAGE COMPANY)**
 **NOTES
                TO FINANCIAL STATEMENTS**
 **AS
                OF DECEMBER 31, 2006**
 A
        summary
        of changes in estimated quantities of proved reserves for the year ended
        December 31, 2006 is as follows:
 
 Gas
                  (MMcf)
              
              Oil
                  (MBbl)Estimated
                  Proved Reserves:Balance
                  at September 1, 2006
              
              
              3,600
              
              
              -Production
              
              
              55
              
              
              -Estimated
                  Proved Reserves:Balance
                  at December 31, 2006
              
              
              3,545
              
              
              -
 
 Future
        net cash flows presented below reflect the Company’s 10% share and are computed
        using year-end prices and costs and are net of all overriding royalty revenue
        interests.
 
 Future
        corporate overhead expenses and interest expense have not been
        included.
 
 December
                  31, 2006Future
                  net cash flows
              
              $
              2,828,910Future
                  costs:Production
              
              
              -Development
                  and abandonment
              
              
              (2,000
              )Income
                  taxes
              
              
              (1,063,800
              )Future
                  net cash flows
              
              
              1,763,11010%
                  discount factor
              
              
              .62092Standardized
                  measure of discounted future net cash flows
              
              $
              1,336,716Estimated
                  future development cost anticipated for fiscal 2007 and 2008 on
                  existing
                  properties
              
              $
              -
 
 **NOTE
        10****SUBSEQUENT
        EVENT**
 
 Subsequent
        to December 31, 2006, the third party referred to above advanced an additional
        $17,755 in payment of operating and oil well development expenses.
  F-18


SIGNATURE




In
      accordance with Section 13 or 15(d) of the Exchange Act, the
      Registrant caused this report to be signed on its behalf by the undersigned,
      thereunto duly authorized.




ODYSSEY OIL AND GAS, INC.(Registrant)Dated: March 30, 2007By:
              /s/ Arthur JohnsonArthur JohnsonPrincipal Executive Officer, Sole
              DirectorPresident,
                and Chief Financial Officer and Principal Accounting
                Officer.




21