UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2010

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

For the transition period from __________ to _________

Commission file Number 333-106299

ODYSSEY OIL AND ENERGY, INC
(Exact name of small business issuer as specified in its charter)

ODYSSEY OIL AND GAS, INC.
(Former Name of Registrant)

FLORIDA
  
65-1139235
(State or other jurisdiction of incorporation
  
(IRS Employer Identification No.)
or organization)
    

18 George Avenue
Rivonia, 2128 South Africa
Address of Principal Executive Offices

+27 (11) 807-1446
(Issuer's telephone number)

Check whether the issuer: (1) filed all documents reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act 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 whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  ¨ Yes  ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨                    Accelerated filer   ¨

Non-accelerated filer (Do not check if a smaller reporting company)   ¨

Smaller reporting company  x

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

The number of shares of the registrant's common stock, par value $0.0001 per share, outstanding as of May 21 was 228,566,500 shares.

 
 

PART I. FINANCIAL INFORMATION
    
Item 1. Consolidated Condensed Financial Statements and Notes - Quarter Ended March 31, 2010
  
4
Item 2. Management's Discussion and Analysis or Plan of Operations
  
21
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
  
24
Item 4T. Controls and Procedures
  
24
PART II. OTHER INFORMATION
    
Item 1. Legal Proceedings
  
25
Item 1A. Risk Factors
  
25
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds  
  
25
Item 3. Default Upon Senior Securities  
  
25
Item 4. Removed and Reserved
  
25
Item 5. Other Information  
  
25
Item 6. Exhibits and Reports on Form 8-K  
  
25
Signatures  
  
26
 
 
2
 

FORWARD LOOKING STATEMENT

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.
 
3

Item 1. Financial Statements

Unaudited condensed consolidated financial statements as of the quarter ended March 31, 2010 are submitted in compliance with Rule 210.8-03 of Regulation S-X.
 
ODYSSEY OIL & ENERGY, INC.  & SUBSIDIARIES
(F/K/A ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
(A DEVELOPMENT STAGE COMPANY)

CONTENTS

PAGE
5
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2010 (UNAUDITED) AND DECEMBER 31, 2009
     
PAGE
6
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009 AND FOR THE PERIOD FROM MAY 28, 2003 (INCEPTION) TO MARCH 31, 2010 (UNAUDITED)
     
PAGES
7 – 9
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) FOR THE PERIOD FROM MAY 28, 2003 (INCEPTION) TO MARCH 31, 2010 (UNAUDITED)
     
PAGES
10 – 11
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009 AND FOR THE PERIOD FROM MAY 28, 2003 (INCEPTION) TO MARCH  31, 2010 (UNAUDITED)
     
PAGES
12 - 20
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 
4
 
 
ODYSSEY OIL & ENERGY, INC. & SUBSIDIARIES
(F/K/A ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEETS

   
As of
    
As of
  
   
March 31,
    
December 31,
  
   
2010
    
2009
  
   
(Unaudited)
        
ASSETS
            
             
CURRENT ASSETS
            
Cash
   $ 24,920     $ 4,907  
Loans receivable, net of allowance for doubtful accounts of $594,000 and $0, respectively
     47,851       729,589  
Total Current Assets
     72,771       734,496  
                 
Property & Equipment, net
     1,000       1,000  
Loan receivable - Hylem Water (Pty) Ltd.
     25,780       -  
                 
TOTAL ASSETS
   $ 99,551     $ 735,496  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
                
                 
CURRENT LIABILITIES
                
Accounts payable and accrued expenses
   $ 670,559     $ 557,842  
Loans payable and accrued interest - related parties
     435,119       425,030  
Total Liabilities
     1,105,678       982,872  
                 
COMMITMENTS AND CONTINGENCIES
                
                 
STOCKHOLDERS' DEFICIT
                
Preferred stock, $.0001 par value, 20,000,000 shares authorized,
                
none issued and outstanding
     -       -  
Common stock, $.0001 par value, 650,000,000 shares authorized,
                
228,566,500 shares issued and outstanding
     22,857       22,857  
Additional paid-in capital
     66,476,078       66,473,078  
Accumulated deficit during development stage
     (67,511,125 )     (66,750,595 )
Accumulated other comprehensive income
     6,063       7,284  
Total Stockholders' Deficit
     (1,006,127 )     (247,376 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
   $ 99,551     $ 735,496  

See accompanying notes to unaudited condensed consolidated financial statements.

 
5
 

ODYSSEY OIL & ENERGY, INC. & SUBSIDIARIES
(F/K/A ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)

   
For the Three
    
For the Three
    
For the Period from
  
   
Months Ended
    
Months Ended
    
May 28,2003 (Inception)
  
   
March 31, 2010
    
March 31, 2009
    
to March 31, 2010
  
                   
REVENUE
   $ -     $ -     $ 26,695  
                         
OPERATING EXPENSES
                        
Drilling costs and expenses
     -       -       51,886  
General and administrative
     148,730       16,358       1,997,435  
Professional fees
     10,297       12,609       168,812  
Amortization
     -       -       33,400  
Impairment of investment in oil and gas leases
     -       -       247,931  
Impairment of bio-fuels plant development contract
     -       -       36,717,235  
Total Operating Expenses
     159,027       28,967       39,216,699  
                         
LOSS FROM CONTINUING OPERATIONS
     (159,027 )     (28,967 )     (39,190,004 )
                         
OTHER INCOME (EXPENSE)
                        
Interest income
     -       1       2,794  
Interest expense
     (7,503 )     (6,331 )     (80,773 )
Total Other Income (Expense)
     (7,503 )     (6,330 )     (77,979 )
                         
LOSS FROM CONTINUING OPERATIONS BEFORE
                        
INCOME TAXES
     (166,530 )     (35,297 )     (39,267,983 )
                         
Provision for Income Taxes
     -       -       -  
                         
LOSS FROM CONTINUING OPERATIONS
     (166,530 )     (35,297 )     (39,267,983 )
                         
GAIN ON DISPOSAL OF SUBSIDIARIES
     -       -       745,118  
LOSS FROM DISCONTINUED OPERATIONS
     (594,000 )     (504 )     (32,733,852 )
                         
NET LOSS
     (760,530 )     (35,801 )     (71,256,717 )
                         
OTHER COMPREHENSIVE INCOME
                        
Foreign currency translation (loss) gain
     (1,221 )     532       6,063  
                         
COMPREHENSIVE LOSS
   $ (761,751 )   $ (35,269 )   $ (71,250,654 )
                         
LOSS PER COMMON SHARE - BASIC AND DILUTED
                        
Continuing operations
   $ (0.00 )   $ (0.00 )        
Discontinued operations
     (0.00 )     (0.00 )        
    $ (0.00 )   $ (0.00 )        
Total Basic and Diluted Loss per Common Share
                        
                         
Weighted average number of shares outstanding during the year -
                        
Basic and Diluted
     228,566,500       143,742,500          
 
See accompanying notes to unaudited condensed consolidated financial statements.

 
6
 

ODYSSEY OIL & ENERGY, INC. & SUBSIDIARIES
(F/K/A ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD FROM MAY 28, 2003 (INCEPTION) TO MARCH 31, 2010
(UNAUDITED)

                                 
Accumulated
    
Accumulated
              
                           
Additional
    
Deficit During
    
Other
    
Deferred
        
   
Preferred Stock
    
Common Stock
    
Paid-In
    
Development
    
Comprehensive
    
Stock
        
   
Shares
    
Amount
    
Shares
    
Amount
    
Capital
    
Stage
    
Income
    
Compensation
    
Total
  
Common stock issued to founders for cash ($.03 per share)
     -     $ -       7,500     $ 1     $ 249     $ -     $ -     $ -     $ 250  
                                                                         
Common stock issued for license ($.03 per share
     -       -       49,500,000       4,950       1,645,050       -       -       -       1,650,000  
                                                                         
Common stock issued to officer as compensation ($.03 per share)
     -       -       21,375,000       2,138       710,362       -       -       -       712,500  
                                                                         
Common stock issued for cash ($.03 per share)
     -       -       2,400,000       240       79,760       -       -       -       80,000  
                                                                         
Common stock issued for cash ($.15 per share)
     -       -       833,334       83       124,917       -       -       -       125,000  
                                                                         
Common stock issued to consultant for services ($.03 per share)
     -       -       24,600,000       2,460       817,540       -       -       -       820,000  
                                                                         
Net loss for the period from May 28, 2003 (inception) to December 31, 2003
     -       -       -       -       -       (1,737,805 )     -       -       (1,737,805 )
                                                                         
Balance, December 31, 2003
     -       -       98,715,834       9,872       3,377,878       (1,737,805 )     -       -       1,649,945  
                                                                         
Common stock issued for cash ($.15 per share)
     -       -       2,016,693       202       302,301       -       -       -       302,503  
                                                                         
Net loss, 2004
     -       -       -       -       -       (551,203 )     -       -       (551,203 )
                                                                         
Balance, December 31, 2004
     -       -       100,732,527       10,074       3,680,179       (2,289,008 )     -       -       1,401,245  
                                                                         
Common stock issued in reverse merger
     -       -       33,292,500       3,329       (3,329 )     -       -       -       -  
                                                                         
Common stock issued to officer for services ($.01 per share)
     -       -       15,000,000       1,500       148,500       -       -       -       150,000  
                                                                         
Common stock cancelled related to license rights ($.01 per share)
     -       -       (49,500,000 )     (4,950 )     (490,050 )     -       -       -       (495,000 )
                                                                         
In-kind contribution
     -       -       -       -       12,000       -       -       -       12,000  
                                                                         
Warrants issued for non-exclusive license
     -       -       -       -       143,238       -       -       -       143,238  
                                                                         
Net loss, 2005
     -       -       -       -       -       (1,696,989 )     -       -       (1,696,989 )
                                                                         
Balance, December 31, 2005
     -       -       99,525,027       9,953       3,490,538       (3,985,997 )     -       -       (485,506 )
See accompanying notes to unaudited condensed consolidated financial statements.

 
7
 

ODYSSEY OIL & ENERGY, INC. & SUBSIDIARIES
(F/K/A ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD FROM MAY 28, 2003 (INCEPTION) TO MARCH 31, 2010 (CONTINUED)
(UNAUDITED)

                                 
Accumulated
    
Accumulated
              
                           
Additional
    
Deficit During
    
Other
    
Deferred
        
   
Preferred Stock
    
Common Stock
    
Paid-In
    
Development
    
Comprehensive
    
Stock
        
   
Shares
    
Amount
    
Shares
    
Amount
    
Capital
    
Stage
    
Income
    
Compensation
    
Total
  
                                                       
                                                       
In-kind contribution
     -       -       -       -       12,000       -       -       -       12,000  
                                                                         
Common stock cancelled in connection with exchange of ownership in CardioBioMedical Corporation to its original stockholders
     -       -       (66,232,527 )     (6,623 )     (3,211,742 )     3,745,592       -       -       527,227  
                                                                         
Common stock issued to purchase investment in oil and gas leases ($.003 per share)
     -       -       60,000,000       6,000       159,000       -       -       -       165,000  
                                                                         
Net loss, 2006
     -       -       -       -       -       (140,836 )     -       -       (140,836 )
                                                                         
Balance, December 31, 2006
     -       -       93,292,500       9,330       449,796       (381,241 )     -       -       77,885  
                                                                         
In-kind contribution
     -       -       -       -       12,000       -       -       -       12,000  
                                                                         
Common shares issued to acquire 100% of outstanding common shares of Uranium Acquisition Corp., Inc.
     -       -       15,000,000       1,500       4,248,500       -       -       -       4,250,000  
                                                                         
Net loss, 2007
     -       -       -       -       -       (4,635,418 )     -       -       (4,635,418 )
                                                                         
Balance, December 31, 2007
     -       -       108,292,500       10,830       4,710,296       (5,016,659 )     -       -       (295,533 )
                                                                         
In-kind contribution
     -       -       -       -       12,000       -       -       -       12,000  
                                                                         
Common stock issued to consultant for services ($.82 per share)
     -       -       450,000       45       367,455       -       -       -       367,500  
                                                                         
Common shares issued to acquire 100% of outstanding common shares of ALG Bio Oils Ltd.
     -       -       35,000,000       3,500       21,696,500       -       -       -       21,700,000  
                                                                         
Other comprehensive income
     -       -       -       -       -       -       3,434       -       3,434  
                                                                         
Net loss, 2008
     -       -       -       -       -       (22,111,044 )     -       -       (22,111,044 )
                                                                         
Balance, December 31, 2008
     -       -       143,742,500       14,375       26,786,251       (27,127,703 )     3,434       -       (323,643 )

See accompanying notes to unaudited condensed consolidated financial statements.

 
8
 

ODYSSEY OIL & ENERGY, INC. & SUBSIDIARIES
(F/K/A ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD FROM MAY 28, 2003 (INCEPTION) TO MARCH 31, 2010 (CONTINUED)
(UNAUDITED)

                                 
Accumulated
    
Accumulated
              
                           
Additional
    
Deficit During
    
Other
    
Deferred
        
   
Preferred Stock
    
Common Stock
    
Paid-In
    
Development
    
Comprehensive
    
Stock
        
   
Shares
    
Amount
    
Shares
    
Amount
    
Capital
    
Stage
    
Income
    
Compensation
    
Total
  
                                                       
                                                       
In-kind contribution
     -       -       -       -       12,000       -       -       -       12,000  
                                                                         
Additional common shares issued in connection with acquisition of ALG Bio Oils Ltd. ($.20 per share)
     -       -       75,000,000       7,500       14,992,500       -       -       -       15,000,000  
                                                                         
Common shares issued to acquire 51% of outstanding common shares of H-Power (Pty) Ltd. ($.58 per share)
     -       -       65,000,000       6,500       37,693,500       -       -       -       37,700,000  
                                                                         
Common stock issued to consultant of ALG Bio Oils Ltd. for services ($.58 per share)
     -       -       1,356,500       135       786,635       -       -       -       786,770  
                                                                         
Common stock issued to consultant of H-Power (Pty) Ltd. for services ($.27 per share)
     -       -       2,200,000       220       593,780       -       -       -       594,000  
                                                                         
Common shares issued to officer for services rendered ($.08 per share)
                     5,000,000       500       399,500       -       -       -       400,000  
                                                                         
Common stock issued for cash ($.12 per share)
     -       -       1,267,500       127       152,412       -       -       -       152,539  
                                                                         
Cancellation of shares originally issued to acquire 51% of outstanding common shares of H-Power (Pty) Ltd. ($.23 per share)
                     (65,000,000 )     (6,500 )     (14,943,500 )                             (14,950,000 )
                                                                         
Other comprehensive income
     -       -       -       -       -       -       3,850       -       3,850  
                                                                         
Net loss, 2009
     -       -       -       -       -       (39,622,892 )     -       -       (39,622,892 )
                                                                         
Balance, December 31, 2009
     -       -       228,566,500       22,857       66,473,078       (66,750,595 )     7,284       -       (247,376 )
                                                                         
In-kind contribution
     -       -       -       -       3,000       -       -       -       3,000  
                                                                         
Other comprehensive (loss)
     -       -       -       -       -       -       (1,221 )     -       (1,221 )
                                                                         
Net loss, three months ended March 31, 2010
     -       -       -       -       -       (760,530 )     -       -       (760,530 )
                                                                         
Balance, March 31, 2010
     -       -     $ 228,566,500     $ 22,857     $ 66,476,078     $ (67,511,125 )   $ 6,063     $ -     $ (1,006,127 )
See accompanying notes to unaudited condensed consolidated financial statements.

 
9
 

ODYSSEY OIL & ENERGY, INC. & SUBSIDIARIES
(F/K/A ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

   
For the Three
    
For the Three
    
For the Period from
  
   
Months Ended
    
Months Ended
    
May 28,2003 (Inception)
  
   
March 31, 2010
    
March 31, 2009
    
to March 31, 2010
  
                   
CASH FLOWS FROM OPERATING ACTIVITIES:
                  
Net loss
   $ (760,530 )   $ (35,801 )   $ (71,256,717 )
Net loss from discontinued operations
     (594,000 )     (504 )     (31,988,734 )
Loss from continuing operations
     (166,530 )     (35,297 )     (39,267,983 )
Adjustments to reconcile net loss to net cash used in operating activities:
                        
In-kind contribution
     3,000       3,000       36,000  
Stock issued for services
     -       -       1,198,769  
Amortization
     -       -       33,400  
Impairment of investment in oil and gas leases
     -       -       247,931  
Impairment of bio-fuels plant development contract
     -       -       21,717,055  
Impairment in plant commissioning
     -       -       15,000,000  
Changes in operating assets and liabilities:
                        
Increase in accounts payable and accrued expenses
     120,219       11,961       748,168  
Cash flows from operating activities in continuing operations
     (43,311 )     (20,336 )     (286,660 )
Cash flows from operating activities in discontinued operations
     -       (1,029 )     (440,497 )
Net Cash Used In Operating Activities
     (43,311 )     (21,365 )     (727,157 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES:
                        
Loans receivable
     87,738       -       (641,851 )
Loan receivable - Hylem Water (Pty) Ltd.
     (25,780 )             (25,780 )
Purchase of property and equipment
     -       -       (116,331 )
Purchase of website
     -       -       (1,000 )
Acquisition of ALG Bio Oils Ltd. net of cash purchased
     -       -       180  
Cash flows from investing activities in continuing operations
     61,958       -       (784,782 )
Cash flows from investing activities in discontinued operations
     -       -       -  
Net Cash Provided By (Used In) Investing Activities
     61,958       -       (784,782 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES:
                        
Proceeds from common stock
     -       -       152,539  
Repayment of stockholder's loans
     (35,693 )     -       (51,628 )
Proceeds from loans payable - related parties
     38,280       21,533       383,938  
Cash flows from financing activities in continuing operations
     2,587       21,533       484,849  
Cash flows from financing activities in discontinued operations
     -       -       1,043,118  
Net Cash Provided By Financing Activities
     2,587       21,533       1,527,967  
                         
EFFECT ON EXCHANGE RATE ON CASH
     (1,221 )     532       8,892  
                         
NET INCREASE IN CASH
     20,013       700       24,920  
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
     4,907       1,196       -  
CASH AND CASH EQUIVALENTS AT END OF YEAR
   $ 24,920     $ 1,896     $ 24,920  
See accompanying notes to unaudited condensed consolidated financial statements.

 
10
 

ODYSSEY OIL & ENERGY, INC. & SUBSIDIARIES
(F/K/A ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)

   
For the Three
    
For the Three
    
For the Period from
  
   
Months Ended
    
Months Ended
    
May 28,2003 (Inception)
  
   
March 31, 2010
    
March 31, 2009
    
to March 31, 2010
  
                   
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: