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 September 30, 2008

o 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 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):

 
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 November 10, 2008 was 143,742,500 shares.


PART I. FINANCIAL INFORMATION
Item 1. Consolidated Condensed Financial Statements and Notes - Quarter Ended September 30, 2008
3
Item 2. Management's Discussion and Analysis or Plan of Operation
19
Item 3. Controls and Procedures  
22
PART II. OTHER INFORMATION
22
Item 1. Legal Proceedings  
22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds  
22
Item 3. Default Upon Senior Securities  
22
Item 4. Submission of Matters to a Vote of Security Holders  
22
Item 5. Other Information  
22
Item 6. Exhibits and Reports on Form 8-K  
23
Signatures  
23

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.

Item 1. Financial Statements

Unaudited financial statements as of the quarter ended September 30, 2008 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
  
4
  
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2008 (UNAUDITED) AND DECEMBER 31, 2007
         
PAGE
  
5
  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007 AND FOR THE PERIOD FROM MAY 28, 2003 (INCEPTION) TO SEPTEMBER 30, 2008 (UNAUDITED)
         
PAGES
  
8
  
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT) FOR THE PERIOD FROM MAY 28, 2003 (INCEPTION) TO SEPTEMBER 30, 2008 (UNAUDITED)
         
PAGES
  
6-7
  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007 AND FOR THE PERIOD FROM MAY 28, 2003 (INCEPTION) TO SEPTEMBER 30, 2008 (UNAUDITED)
         
PAGES
  
9-18
  
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

3

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
  
   
September 30
  
December 31,
  
   
2008
  
2007
  
   
(Unaudited)
      
ASSETS
          
           
CURRENT ASSETS
          
Cash
  
$
7,993
  
$
450
  
Website
    
1,000
    
-
  
Total Assets
  
$
8,993
  
$
450
  
               
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
              
               
CURRENT LIABILITIES
              
Accounts payable and accrued expenses
  
$
77,609
  
$
87,085
  
Loans payable and accrued interest - related parties
    
308,129
   
208,898
 
Total Current Liabilities
    
385,738
   
295,983
 
               
STOCKHOLDERS' EQUITY (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, 143,742,500 and 108,292,500 shares issued and outstanding, respectively
    
14,375
    
10,830
  
Additional paid-in capital
    
26,783,251
   
4,710,296
 
Deferred stock compensation
    
(91,875
)
  
-
 
Accumulated deficit during development stage
    
(27,083,396
)
  
(5,016,659
)
Accumulated other comprehensive income
    
900
   
-
 
Total Stockholders' Equity (Deficit)
    
(376,745
)
  
(295,533
)
               
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
  
$
8,993
  
$
450
  

See accompanying notes to unaudited condensed consolidated financial statements.

4

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
  
                   
Period From
  
   
For the Three
  
For the Three
  
For the Nine
  
For the Nine
  
May 28,2003
  
   
Months Ended
  
Months Ended
  
Months Ended
  
Months Ended
  
(Inception)
  
   
September 30, 2008
  
September 30, 2007
  
September 30, 2008
  
September 30, 2007
  
to September 30, 2008
  
                       
REVENUE
  
$
-
  
$
-
  
$
-
  
$
7,450
  
$
26,695
  
                                 
OPERATING EXPENSES
                                
Drilling costs and expenses
    
-
   
-
   
-
   
-
   
51,886
 
General and administrative
    
97,649
   
35,652
   
304,161
   
48,324
   
357,733
 
Professional fees
    
10,170
   
6,604
   
29,369
   
27,513
   
134,357
 
Amortization
    
-
   
-
   
-
   
18,668
   
33,400
 
Impairment of investment in oil and gas leases
    
-
   
-
   
-
   
159,716
   
247,931
 
Impairment of bio-fuels plant development contract
    
-
   
-
   
21,717,235
   
-
   
21,717,235
 
Acquisition costs
    
-
   
-
   
-
   
-
   
4,250,000
 
Total Operating Expenses
    
107,819
   
42,256
   
22,050,765
   
254,221
   
26,792,542
 
                                 
LOSS FROM CONTINUING OPERATIONS
    
(107,819
)
  
(42,256
)
  
(22,050,765
)
  
(246,771
)
  
(26,765,847
)
                                 
OTHER INCOME (EXPENSE)
                                
Interest income
    
-
   
-
   
-
   
-
   
2,789
 
Interest expense
    
(5,923
)
  
(4,004
)
  
(15,972
)
  
(10,325
)
  
(39,169
)
Total Other Expense
    
(5,923
)
  
(4,004
)
  
(15,972
)
  
(10,325
)
  
(36,380
)
                                 
LOSS BEFORE DISCONTINUED OPERATIONS
    
(113,742
)
  
(46,260
)
  
(22,066,737
)
  
(257,096
)
  
(26,802,227
)
                                 
LOSS FROM DISCONTINUED OPERATIONS
    
-
   
-
   
-
   
-
   
(4,026,761
)
                                 
LOSS BEFORE PROVISION FOR INCOME TAXES
    
(113,742
)
  
(46,260
)
  
(22,066,737
)
  
(257,096
)
  
(30,828,988
)
                                 
Provision for income taxes
    
-
   
-
   
-
   
-
   
-
 
                                 
NET LOSS
    
(113,742
)
  
(46,260
)
  
(22,066,737
)
  
(257,096
)
  
(30,828,988
)
                                 
OTHER COMPREHENSIVE INCOME
                                
Foreign currency translation gain
   
852
   
-
   
900
   
-
   
900
 
                                 
COMPREHENSIVE LOSS
  
$
(112,890
)
$
(46,260
)
$
(22,065,837
)
$
(257,096
)
$
(30,828,088
)
                                 
LOSS PER COMMON SHARE - BASIC AND DILUTED
                                
Continuing operations
  
$
-
  
$
-
  
$
(0.33
)
$
(0.01
)
      
Discontinued operations
    
-
   
-
   
-
   
-
       
                                 
Net loss per share - basic and diluted
  
$
-
  
$
-
  
$
(0.33
)
$
(0.01
)
      
                                 
Weighted average number of shares outstanding during the period - basic and diluted
    
143,742,500
    
93,292,500
    
66,559,270
    
93,292,500
        

See accompanying notes to the 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 CASH FLOWS
(UNAUDITED)

           
For the
  
           
Period From
  
   
For the Six
  
For the Six
  
May 28,2003
  
   
Months Ended
  
Months Ended
  
(Inception)
  
   
September 30, 2008
  
September 30, 2007
  
to September 30, 2008
  
               
CASH FLOWS FROM OPERATING ACTIVITIES:
              
Net loss
  
$
(22,066,737
)
$
(257,096
)
$
(30,828,988
)
Net loss from discontinued operations
    
-
   
-
   
(4,026,761
)
Loss from continuing operations
    
(22,066,737
)
  
(257,096
)
  
(26,802,227
)
Adjustments to reconcile net loss to net cash
                    
used in operating activities:
                    
In-kind contributions
    
284,625
   
9,000
   
305,625
 
Amortization
    
-
   
18,668
   
33,400
 
Impairment of investment in oil and gas leases
    
-
   
159,716
   
247,931
 
Impairment of bio-fuels plant development contract
    
21,717,235
   
-
   
21,717,235
 
Acquisition costs
    
-
   
-
   
4,250,000
 
Changes in operating assets and liabilities:
                    
(Increase) decrease in accounts receivable
    
-
   
7,843
   
-
 
Increase (decrease) in accounts payable and
                   
accrued expenses
    
6,496
   
(28,368
)
  
113,614
 
Cash flows from operating activities in continuing operations
    
(58,381
)
  
(90,237
)
  
(134,422
)
Cash flows from operating activities in discontinued
                    
operations
    
-
   
-
   
(1,034,023
)
Net Cash (Used In) Operating Activities
    
(58,381
)
  
(90,237
)
  
(1,168,445
)
                     
CASH FLOWS FROM INVESTING ACTIVITIES:
                    
Purchase of property and equipment
          
-
   
(116,331
)
Purchase of website
    
(1,000
)
        
(1,000
)
Acquisition of ALG Bio Oils Ltd. net of cash purchased
    
180
   
-
   
180
 
Cash flows from investing activities in continuing operations
    
(820
)
  
-
    
(117,151
)
Cash flows from investing activities in discontinued operations
    
-
    
-
    
-
  
Net Cash Provided By (Used In) Investing Activities
    
(820
)
  
-
   
(117,151
)
                     
CASH FLOWS FROM FINANCING ACTIVITIES:
                    
Repayment of stockholder's loans
    
-
   
-
   
(609
)
Loans Payable
    
7,676
         
7,676
 
Loans payable - related parties
    
58,168
   
90,688
   
242,504
 
Cash flows from financing activities in continuing operations
    
65,844
    
90,688
    
249,571
  
Cash flows from financing activities in discontinued operations
    
-
    
-
    
1,043,118
  
Net Cash Provided By Financing Activities
    
65,844
   
90,688
   
1,292,689
 
                     
EFFECT ON EXCHANGE RATE ON CASH
    
900
   
-
   
900
 
                     
NET INCREASE IN CASH
    
7,543
   
451
   
7,993
 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
450
    
-
    
-
  
CASH AND CASH EQUIVALENTS AT END OF PERIOD
  
$
7,993
  
$
451
  
$
7,993
  

See accompanying notes to the 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 STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)

           
For the
  
           
Period From
  
   
For the Nine
  
For the Nine
  
May 28,2003
  
   
Months Ended
  
Months Ended
  
(Inception)
  
   
September 30, 2008
  
September 30, 2007
  
to September 30, 2008
  
               
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
                    
                     
Cash paid for income taxes
  
$
-
  
$
-
  
$
1,824
  

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

On June 16, 2008, the Company issued 35 million shares of common stock to acquire 100% of the outstanding common shares of ALG Bio Oils Ltd.

During March 2008, the Company issued 450,000 shares of common stock with a fair value of $367,500 to a
consultant for services.

On November 20, 2007, the Company issued 15 million shares of common stock to acquire 100% of the outstanding common shares of Uranium Acquisition Corp., Inc.

On April 21, 2006, the Company issued 60 million shares of common stock to purchase a 10% 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 66,232,527 common shares of Odyssey and the warrants to purchase 19,500,000 shares of the Company's common stock was cancelled.

During 2003, the Company issued 49,500,000 shares of common stock with a fair value of $1,650,000 for the license rights to the bio-cybernetic technology and frequency analysis technology.

During 2005, the Company cancelled 49,500,000 shares of common stock with a fair value of $495,000 for the termination of the exclusive rights to the bio-cybernetic technology and frequency analysis technology.

During 2005, the Company issued warrants to purchase 19,500,000 shares of common stock at $.003 for the non-exclusive rights to the bio-cybernetic technology and frequency analysis technology valued at $143,238.

See accompanying notes to the 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 STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD FROM MAY 28, 2003 (INCEPTION) TO SEPTEMBER 30, 2008
(UNAUDITED)

                       
Accumulated
              
                       
Deficit
  
Accumulated
          
                   
Additional
  
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 consultant 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
)
                                                         
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
    
-
   
-
   
-
   
-
   
9,000
   
-
   
-
   
-
   
9,000
 
                                                         
Common stock issued to consultant for services ($.82 per share)
    
-
    
-
    
450,000
    
45
    
367,455
    
-
    
-
    
(91,875
)
  
275,625
  
                                                         
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
    
-
   
-
   
-
   
-
   
-
   
-
   
900
   
-
   
900
 
                                                         
Net loss for the nine months ended September 30, 2008
    
-
   
-
   
-
   
-
   
-
   
(22,066,737
)
  
-
   
-
   
(22,066,737
)
                                                         
Balance, September 30, 2008
    
-
 
$
-
    
143,742,500
 
$
14,375
  
$
26,783,251
  
$
(27,083,396
)
$
900
  
$
(91,875
)
$
(376,745
)

See accompanying notes to the unaudited condensed consolidated financial statements.

8

ODYSSEY OIL & ENERGY, INC. & SUBSIDIARIES
(F/K/A ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2008
(UNAUDITED)

NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

(A) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations.

It is management’s opinion however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statements presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year.

For further information, refer to the financial statements and footnotes included in the Company’s Form 10-KSB for the year ended December 31, 2007.

Effective September 20, 2008, the Articles of Incorporation were amended to change the name of the corporation to Odyssey Oil & Energy, Inc.

The financial statements include the accounts of Odyssey Oil & Gas, Inc. (F/K/A Advanced Sports Technologies, Inc.) and CardioBioMedical Corporation (a development stage company). On April 21, 2006, the Company exchanged all of its ownership in CardioBioMedical Corporation to the original stockholders. All amounts relating to the operations of CardioBioMedical Corporation have been reflected as discontinued operations. CardioBioMedical Corporation originally merged with Odyssey Oil & Gas, Inc. (F/K/A Advanced Sports Technologies, Inc.) on September 23, 2005. As a result of the transaction referred to above, Centurion Gold Holdings, Inc., a related public company, owns approximately 42% of the Company.

Odyssey Oil & Energy, Inc. (F/K/A Odyssey Oil & Gas, Inc. and previously Advanced Sports Technologies, Inc.) is hereafter referred to as the “Company.”

(B) Principles of Consolidation

The financial statements for 2008 include the accounts of Odyssey Oil & Energy, Inc.; Uranium Acquisition Corp., Inc. (a development stage company), whose sole asset is a 49% interest, acquired November 20, 2007, in MCA Uranium One (Pty) Limited; and ALG Bio Oils Ltd. (a development stage company), acquired June 16, 2008, from the dates of acquisition. All inter-company accounts during the period of consolidation have been eliminated.

9

ODYSSEY OIL & ENERGY, INC. & SUBSIDIARIES
(F/K/A ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2008
(UNAUDITED)

The financial statements for 2007 include the accounts of Odyssey Oil & Energy, Inc. (F/K/A Odyssey Oil & Gas, Inc. and previously Advanced Sports Technologies, Inc.).

(C) Investment in Mining Company

Through its acquisition of Uranium Acquisition Corp., Inc., the Company owns a 49% interest in MCA Uranium One (Pty) Limited (“MCA”), a South African company which owns a non-operating uranium mine in the Bela Bela district in South Africa. The Company has agreed to provide financial support to MCA to fund all exploration costs up to proving the existence of ore. Under FIN 46R, MCA is dependent on the Company for its funding and should therefore be consolidated, and in accordance with FIN 46R, “Consolidation of variable Interest Entities,” MCA has been consolidated with the Company.

(D) 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.

(E) 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 September 30, 2008 and 2007, there were no common stock equivalents.

(F) Cash and Cash Equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. The Company did not have any cash equivalents as of the balance sheet dates presented in the financial statements.

10

ODYSSEY OIL & ENERGY, INC. & SUBSIDIARIES
(F/K/A ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2008
(UNAUDITED)

(G) Comprehensive Income

SFAS No. 130, "Reporting Comprehensive Income" establishes standards for reporting and presentation of changes in stockholders' equity resulting from non-owner sources. Comprehensive income is the total of net income (loss) and other comprehensive income. For the Company, other comprehensive income is comprised entirely of foreign currency translation adjustments.

(H) Stock Split

Effective May 1, 2008, the Board of Directors approved a 3 for 1 stock split. As a result of the stock split, all share and per share data have been retroactively adjusted to give effect to the stock split.

(I) 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.

(J) Impairment

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.

(K) Foreign Currency Translation

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

11

ODYSSEY OIL & ENERGY, INC. & SUBSIDIARIES
(F/K/A ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2008
(UNAUDITED)

(L) Recent Pronouncements

In December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51”. This statement improves the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards that require; the ownership interests in subsidiaries held by parties other than the parent and the amount of consolidated net income attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the consolidated statement of income, changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary be accounted for consistently, when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary be initially measured at fair value, entities provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS No. 160 affects those entities that have an outstanding noncontrolling interest in one or more subsidiaries or that deconsolidate a subsidiary. SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Early adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133” (SFAS 161). This statement is intended to improve transparency in financial reporting by requiring enhanced disclosures of an entity’s derivative instruments and hedging activities and their effects on the entity’s financial position, financial performance, and cash flows. SFAS 161 applies to all derivative instruments within the scope of SFAS 133, “Accounting for Derivative Instruments and Hedging Activities” (SFAS 133) as well as related hedged items, bifurcated derivatives, and nonderivative instruments that are designated and qualify as hedging instruments. Entities with instruments subject to SFAS 161 must provide more robust qualitative disclosures and expanded quantitative disclosures. SFAS 161 is effective prospectively for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application permitted. The adoption of this statement is not expected to have a material effect on the Company's financial statements.

12

ODYSSEY OIL & ENERGY, INC. & SUBSIDIARIES
(F/K/A ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2008
(UNAUDITED)

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” SFAS No. 162 identifies the sources of accounting principles and provides entities with a framework for selecting the principles used in preparation of financial statements that are presented in conformity with GAAP. The current GAAP hierarchy has been criticized because it is directed to the auditor rather than the entity, it is complex, and it ranks FASB Statements of Financial Accounting Concepts, which are subject to the same level of due process as FASB Statements of Financial Accounting Standards, below industry practices that are widely recognized as generally accepted but that are not subject to due process. The Board believes the GAAP hierarchy should be directed to entities because it is the entity (not its auditors) that is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP. The adoption of FASB 162 is not expected to have a material impact on the Company’s financial position.

In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts-an interpretation of FASB Statement No. 60.” Diversity exists in practice in accounting for financial guarantee insurance contracts by insurance enterprises under FASB Statement No. 60, Accounting and Reporting by Insurance Enterprises. This results in inconsistencies in the recognition and measurement of claim liabilities. This Statement requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation. This Statement requires expanded disclosures about financial guarantee insurance contracts. The accounting and disclosure requirements of the Statement will improve the quality of information provided to users of financial statements. The adoption of FASB 163 is not expected to have a material impact on the Company’s financial position.

NOTE 2
ACQUISITION

On June 16, 2008, the Company acquired 100% of the outstanding common shares of ALG Bio Oils Ltd., a Cyprus development stage company through a share purchase agreement. ALG Bio Oils Ltd. owns 100% of the outstanding shares of ALG Western Oil (Pty) Ltd., a South African company that has a preferred contract with a company to develop a commercial bio-fuels plant. The Company issued 35 million restricted common shares with a fair value of $21,700,000. An additional 75 million restricted common shares are contingent upon the occurrence of future specific events (Note 7). The following summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition:

 
$
180
  
Intangible asset
    
21,717,235
  
Total Assets Acquired
    
21,717,415
  
   
(17,415
)
Net Assets Acquired
  
$
21,700,000
  

13

ODYSSEY OIL & ENERGY, INC. & SUBSIDIARIES
(F/K/A ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2008
(UNAUDITED)

The intangible asset was assigned to bio-fuels plant development contract. Because of the uncertainty of completion and success of the project and the uncertainty of the Company to successfully raise funds for this project, the intangible asset was impaired during the nine months ended September 30, 2008.

The table below summarizes the unaudited pro forma information of the results of operations as though the acquisitions had been completed as of March 1, 2008 (inception of ALG Western Oil, Pty):

 
 
2008
  
Gross revenue
  
$
-
  
Total expenses
    
(22,084,223
)
Net income (loss) before taxes
  
$
(22,084,223
)
Earnings per share
  
$
(0.16
)

NOTE 3
LOANS PAYABLE – RELATED PARTY

During the nine months ended September 30, 2008, a related party advanced an additional $55,842 in partial payment of accounts payable due and other operating expenses. The advances, totaling $189,413 as of September 30, 2008, are unsecured, bear interest at 10% per annum and are due on demand. Accrued interest for loans payable – related party was $36,005 as of September 30, 2008.

During the nine months ended September 30, 2008, a related party advanced to ALG Bio Oils Ltd, the Company’s wholly owned subsidiary, $25,091 in payment of operating expenses. The loans are non-interest bearing and are due at the discretion of the director.

Subsequent to September 30, 2008, an additional $1,384 was advanced to MCA Uranium One (Pty) Ltd, of which the Company’s wholly owned subsidiary owns a minority interest, from a third party. The loans are non-interest bearing and are due on demand (see Note 9).

NOTE 4
STOCKHOLDERS’ EQUITY

Effective September 20, 2008, the Articles of Incorporation were amended to increase the number of authorized common shares to 650,000,000 from 250,000,000. The number of authorized preferred shares remains 20,000,000 shares.

14

ODYSSEY OIL & ENERGY, INC. & SUBSIDIARIES
(F/K/A ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2008
(UNAUDITED)

(A) Common Stock Issued for Cash

During 2003, the Company issued 7,500 shares of common stock to its founder for cash of $250 ($0.033 per share).

During 2003, the Company issued 2,400,000 shares of common stock for cash of $80,000 ($0.33 per share).

During 2003, the Company issued 833,334 shares of common stock for cash of $125,000 ($0.15 per share).

During 2004, the Company issued 2,016,693 shares of common stock for cash of $302,503 ($0.15 per share).

During 2005, the Company issued 33,292,500 shares of common stock to the stockholders of Advanced Sports upon completion of the merger.
 
(B) Common Stock Issued for Services

During 2003, the Company issued 21,375,000 shares of common stock for officer compensation valued for financial accounting purposes at $712,500 ($0.033 per share) based upon recent cash offering prices. The initial 7,500 shares issued upon formation of the corporation were purchased for $.033 per share.

During 2003, the Company issued 49,500,000 shares of common stock for licensing rights valued for financial accounting purposes at $1,650,000 ($0.033 per share, the price paid for the initial 7,500 shares issued upon formation of the corporation) based upon recent cash offering prices. During 2005, these 49,500,000 shares of common stock were cancelled pursuant to a settlement agreement dated September 16, 2005. Under the terms of this agreement, a nontransferable warrant for 19,500,000 common shares at $ .003 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.

During 2003, the Company issued 24,600,000 shares of common stock for consulting services valued for financial accounting purposes at $820,000 ($0.033 per share) based upon recent cash offering prices.

15

ODYSSEY OIL & ENERGY, INC. & SUBSIDIARIES
(F/K/A ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2008
(UNAUDITED)

During 2005, the Company issued 15,000,000 shares of common stock to its Chief Executive Officer and President in recognition and consideration of his service as an officer and director of the Company since June 2003 and his contributions to the progress and development of the Company. For financial accounting purposes, these shares were valued at $150,000 ($0.01 per share) based upon recent market prices of the Company.

Effective January 1 2008, the Company entered into three one year contracts for consulting services. As consideration, the Company issued 450,000 shares of common stock valued for financial accounting purposes at $367,500 ($.82 per share) based upon recent market prices of the Company. The value of the services is being recognized over the contract term. As of September 30, 2008, the Company has recorded $275,625 as consulting expense.

(C) In-kind Contribution

During the nine months ended September 30, 2008, the Company recorded additional paid-in capital of $9,000 for the fair value of rent contributed to the Company by its president.

During 2007, 2006 and 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 66,232,527 common shares of Odyssey and the warrant issued to purchase 19,500,000 shares of the Company’s common stock was cancelled based on the book value of assets and liabilities on the date of exchange.

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

NOTE 5
RELATED PARTY TRANSACTIONS

See Notes 3 and 4.

NOTE 6
DISCONTINUED OPERATIONS

On April 21, 2006, the ownership of CardioBioMedical Corporation was exchanged for 66,232,527 shares of Odyssey common stock to the original stockholders. Accordingly, all amounts relating to the operations of CardioBioMedical Corporation have been reflected as discontinued operations. The net book value of assets and liabilities of CardioBioMedical Corporation was recorded as a distribution on the date of exchange. The loss from discontinued operations was equal to operating expenses of CardioBioMedical Corporation.

16

ODYSSEY OIL & ENERGY, INC. & SUBSIDIARIES
(F/K/A ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2008
(UNAUDITED)

NOTE 7
COMMITMENTS AND CONTINGENCIES

(A) Purchase Agreements

Uranium Acquisition Corp.

During November 2007, the Company signed an agreement under which it acquired 49% of the outstanding shares of Uranium Acquisition Corp., Inc. (“Uranium”), a Florida corporation. The agreement called for the Company to issue 15 million shares of Company stock upon signing of the agreement. The agreement also calls for the Company to issue 30 million shares upon approval of a mining license. In addition, the agreement calls for the Company to deliver 75 million shares of common stock, within 18 months of the signature of the agreement, upon the proving up of uranium reserves being substantially the same as per the “Summary of Geological Area and Write up” presented by Mineral Capital Assets.

The agreement requires each shareholder to provide funding based on the shareholders’ percentage of the pro rata amount of shares held based on the future funding requirements of Uranium. If a shareholder does not provide the required loans, the agreement gives the remaining shareholders the right to force the sale of shares held by the non-compliant shareholder. The agreement gives the controlling interest shareholders the right of first refusal on any shares held by the Company at a price to be determined by the shareholders. As of September 30, 2008, no uranium reserves have been proven and no additional shares or loans are due under the agreement.

ALG Bio Oils Ltd.

During June 2008, the Company signed an agreement under which it acquired 100% of the outstanding shares of ALG Bio Oils Ltd. (Note 2). The agreement called for the Company to issue 35 million shares of Company stock upon signing of the agreement. The agreement also calls for the Company to issue an additional 25 million shares upon each of the following events:

1. The successful commissioning of a bio-fuels pilot plant,
2. The ordering of a commercial bio-fuels plant, and
3. The commissioning of a commercial bio-fuels plant.

17

ODYSSEY OIL & ENERGY, INC. & SUBSIDIARIES
(F/K/A ODYSSEY OIL & GAS, INC. & SUBSIDIARIES)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2008
(UNAUDITED)

As of September 30, 2008, none of the required events have been completed and no additional shares are due under the agreement.

NOTE 8
GOING CONCERN

As reflected in the accompanying condensed consolidated financial statements, the Company is in the development stage with an accumulated deficit of $27,083,396, a working capital deficiency of $376,745 and net cash used in operations of $1,168,445 from inception. These factors raise substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

To date, related parties have funded our operating cash requirements. Management has received verbal assurances from these related parties that such funding will continue as needed. Based on these assurances, management expects that the Company will be able to develop its interests in MCA and ALG Bio Oils Ltd. and execute its plan of operations and continue as a going concern.

NOTE 9
SUBSEQUENT EVENT

Subsequent to September 30, 2008, an additional $1,384 was advanced to MCA Uranium One (Pty) Ltd, of which the Company’s wholly owned subsidiary owns a minority interest, from a third party. The loans are non-interest bearing and are due on demand.
(See Note 3).

18
 
Item 2. Management Discussion and Analysis or Plan of Operations

Overview

The Company 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 was eligible to 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 has not generated any revenues through the sale of the Better Buns product or otherwise, and has not engaged in any 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 (“CBM”), a Delaware corporation. The subsidiary merged with and into CBM, with CBM as the surviving corporation which became a subsidiary of the Company. The consideration for the merger consisted of 66,232,527 shares of the Company 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 19,500,000 shares of the Company common stock at a purchase price of $.003 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 (i) attempting to obtain insurance reimbursement for performance of the diagnostic test (ii) establish the device with cardiologists and (iii) finally gain acceptance and use by other physician specialties and hospitals. The Company was unsuccessful in its attempts to obtain insurance reimbursement and marketing CSD.

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The Company was not having much success with CardioBioMedical Corporation and on April 21, 2006, the ownership of CardioBioMedical Corporation was exchanged for 66,232,527 shares of Odyssey common stock with the original stockholders. In addition, we changed the name of the 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.
 
On November 21, 2007 we entered into a new phase of our strategy by acquiring a Uranium Prospect known as Springbok Flats in the Bela Bela District of South Africa.

On January 15, 2008, the Company’s well operator determined that the Leslie 1 Well of BBB Area, Wharton Texas, was no longer commercially viable and the well was plugged and abandoned.

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

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

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:

Investment in Mining Company. Through its acquisition of Uranium Acquisition Corp., Inc., the Company owns a 49% interest in MCA Uranium One (Pty) Limited (“MCA”), a South African company which owns a non operating Uranium mine in the Bela Bela district in South Africa.  The Company has recently been providing all financial support of MCA, and in accordance with FIN 46R, “Consolidation of variable Interest Entities,” MCA has been consolidated with the Company.

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.

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.

Impairment

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.

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Foreign Currency Translation

The functional currency of the Company is the United States Dollar.  The financial statements of the Company are translated to United States dollars using period-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses.  Capital accounts are translated at their historical exchange rates when the capital transaction occurred.  Net gains and losses resulting from foreign exchange translations are included in the statements of operations and stockholders’ equity as other comprehensive income (loss).
 
Management’s Discussion and Analysis and Plan of Operations
 
On June 16, 2008, the Company acquired ALG Bio Oils Limited, which in turn owns 100% of ALG Western Oils (Pty) Ltd. ALG Western Oils has the technology to make bio fuel from algae and has entered into a Letter of Intent with Xstrata Alloys to begin a bio fuel project at the Boshoek smelter in South Africa.

During the quarter ended September 2008, Xstrata Alloys had ordered and paid for the pilot plant to be erected at the Boshoek smelter. Further the Company had identified and duplicated the strain of algae to be used in the pilot project with Xstrata Alloys. The pilot plant is expected to be operational during the fourth quarter of 2008.

During the quarter ended September 30, 2008, Global Investment Group, Inc., a third party, loaned the Company an additional $17,292 for partial payment of accounts payable due as of September 30, 2008 and other operating expenses. The loan bears interest at 10% per annum, is unsecured and is due on demand.

Unlike the quarter and nine months ended September 30, 2007, no revenue was earned from the oil and gas lease during the quarter and nine months ended September 30, 2008 as the well was permanently plugged and abandoned in January 2008.
 
Excluding the impairment of the bio-fuels development contract relating to the acquisition of ALG Bio Oils Limited and the impairment of investment in oil and gas leases, total operating expenses increased to $333,530 from $94,505 for the nine months ended September 30, 2007. The increase was primarily due to consulting fees of $275,625 relating to MCA Uranium One (Pty) Limited.

Total current assets consist of cash of $7,993 and website costs of $1,000. Total liabilities consist of accounts payable of $77,609 and amounts due to related parties totaling $308,129. Global Investment Group, Inc. and various related parties of ALG Bio Oils Limited funded all operating costs during the quarter and will continue to do so. Management has received verbal assurances from these related parties that such funding will continue as needed.

The Company intends to commence prospecting and proving up the reserves of Uranium during 2008. Funding is expected to be provided by Global Investment Group, Inc.

The Company intends building a pilot plant for the bio fuel project at Boshoek in accordance with the terms of the Letter of Intent with Xstrata Alloys during 2008. Funding will be provided by Xstrata Alloys.

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

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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.

The current mailing address of the Company is 6248 NW 32nd Terrace, Boca Raton, FL 33496.

Item 3. 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 quarter ended September 30, 2008 that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting.

PART II-OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

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

Not. Applicable

Item 5. Other Information

Not. Applicable

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Item 6. Exhibits and Reports on Form 8-K.

a) Exhibits:

31 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-15(e) and 15(d)-15(e) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32 Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

b) Reports on Form 8-K
 
The Company filed a Current Reports on Form 8-K on June 23, 2008 in connection with an agreement to acquire 100% of the outstanding stock in Alg Bio Oils Limited. A Form 8-K relating to regulation FD was filed on August 19, 2008

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf of the undersigned, thereunto duly authorized.

ODYSSEY OIL & ENERGY, INC
 
By: /s/ Arthur Johnson
  
Arthur Johnson
  
 
President and Director
  

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