DELTA MUTUAL INC (Form: 10QSB, Received: 08/10/2007 10:29:14)

SECURITIES AND EXCHANGE COMMISSION

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

For the quarterly period ended June 30, 2007

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

For the transition period from ____________ to _________________

Commission File Number 000-30563

(Exact name of registrant as specified in its charter)

DELAWARE		14-1818394

(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

111 NORTH BRANCH STREET, SELLERSVILLE, PA 18960

(Address and telephone number, including area code, of

registrant's principal executive office)

(Former name, former address and former fiscal year, if changed since last report)

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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

At August 8 , 2007, there were 62,272,286 shares of Common Stock, $.0001 par value, outstanding.

		Page

Part I. Financial Information		3

Item 1. Financial Statements		3

Consolidated Balance Sheet as of June 30, 2007 (unaudited)		3

Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2007 and 2006 (unaudited)		4

Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2007 and 2006 (unaudited)		5-6

Notes to Unaudited Consolidated Financial Statements		7

Item 2. Management's Discussion and Analysis or Plan of Operation		12

Item 3. Controls and Procedures		16

Part II. Other Information		16

Item 4. Submission of Matters to Vote of Security Holders		16

Item 5. Other Information		17

Item 6. Exhibits		17

Signatures		17

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America have been condensed or omitted from the following consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. It is suggested that the following consolidated financial statements be read in conjunction with the year-end consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-KSB for the year

ended December 31, 2006.

The results of operations for the three and six months ended June 30, 2007 and 2006 are not necessarily indicative of the results for the entire fiscal year or for any other period.

DELTA MUTUAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(UNAUDITED)

	June 30,
	2007
ASSETS

Current Assets:
Cash	$	66,849
Prepaid expenses		1,954
Total Current Assets		68,803

Property and equipment - net		415,540
Intangible asset		129,892
Other assets		1,400

TOTAL ASSETS	$	615,635

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current Liabilities:
Accounts payable	$	234,326
Accrued expenses		983,042
Convertible debt		929,340
Notes payable		240,655

TOTAL LIABILITIES		2,387,363

Minority interest in consolidated subsidiaries		292,818

Stockholders' Deficiency:
Common stock $0.0001 par value - authorized 250,000,000 shares; 62,272,286 outstanding		6,227
Additional paid-in-capital		8,141,497
Accumulated deficit		(10,212,270	)
Total Stockholders' Deficiency		(2,064,546	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY	$	615,635

See Notes to Unaudited Consolidated Financial Statements

DELTA MUTUAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Six Months Ended June 30,						Three Months Ended June 30,
	2007			2006			2007			2006

Revenue	$	-		$	260,704		$	-		$	99,982

Costs and Expenses
Cost of Sales		-			79,432			-			29,694

General and administrative expenses		1,275,477			1,363,702			733,542			620,288
		1,275,477			1,443,134			733,542			649,982

Loss from operations		(1,275,477	)		(1,182,430	)		(733,542	)		(550,000	)

Accretion of convertible debt		-			(146,751	)		-			(58,798	)

Interest expense		(26,464	)		(23,543	)		(19,481	)		(11,604	)

Loss before minority interest		(1,301,941	)		(1,352,724	)		(753,023	)		(620,402	)

Minority interest share of (income)
loss of consolidated subsidiaries		(47,825	)		(92,059	)		(10,772	)		(21,680	)

Loss before benefit from income taxes		(1,349,766	)		(1,444,783	)		(763,795	)		(642,082	)

Benefit from income taxes		-			-			-			-

Net loss	$	(1,349,766	)	$	(1,444,783	)	$	(763,795	)	$	(642,082	)

Loss per common share- basic and diluted	$	(0.02	)	$	(0.04	)	$	(0.01	)	$	(0.02	)

Weighted average number of common shares outstanding-basic and diluted		62,229,342			41,030,224			62,272,286			41,865,537

See Notes to Unaudited Consolidated Financial Statements

DELTA MUTUAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six Months Ended June 30,
	2007			2006
Cash flows from operating activities:

Net loss	$	(1,349,766	)	$	(1,444,783	)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization		26,116			22,896
Non-cash compensation		13,880			168,432
Accretion of convertible debt		-			146,751
Compensatory element of option issuance		393,490			447,435
Minority interest in income (losses) of consolidated subsidiaries		47,825			92,059
Changes in operating assets and liabilities		433,214			103,250
Net cash used in operating activities		(435,241	)		(463,960	)

Cash flows from investing activities:
Deposit on land		(25,000	)		-
Refund of land deposit		35,500			-
Net cash provided by
investing activities		10,500			-

Cash flows from financing activities:
Proceeds from sale of common stock and deferred stock purchase		10,000			333,000
Proceeds from exercise of warrants		-			73,000
Proceeds from loans		-			30,000
Proceeds from borrowings		-			16,000
Proceeds from convertible debt financing		267,000			-
Repayment of loan		-			(23,910	)
Payments to minority interests		(47,375	)		(6,514	)
Proceeds from minority interest		50,818			79,941

Net cash provided by financing activities		280,443			501,517

Net increase (decrease) in cash		(144,298	)		37,557
Cash - Beginning of period		211,147			67,042
Cash - End of period	$	66,849		$	104,599

See Notes to Unaudited Consolidated Financial Statements

DELTA MUTUAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Continued)

(UNAUDITED)

	Six Months Ended June 30,
	2007		2006
Supplementary information:
Cash paid during year for:
Interest	$	-	$	1,564
Income taxes	$	-	$	-

Changes in operating assets and
liabilities consists of:
(Increase) in accounts receivable		-		(257,674	)
(Increase) decrease in prepaid expenses		248,000		17,809
(Increase) decrease in deposits		-		(49,000	)
Increase in accounts payable and accrued expenses		185,214		392,115
	$	433,214	$	103,250
Non-cash financing activities:

Issuance of common stock for debt	$	-	$	292,634

Issuance of convertible notes for deferred stock purchase	$	266,000	$	-

Issuance of convertible note in lieu of payment of commission	$	26,600	$	-

Issuance of common stock in lieu of payment of accured expenses	$	13,880	$	-

Issuance of common stock for services	$	-	$	307,841

Issuance of common stock for settlement	$	-	$	42,750

See Notes to Unaudited Consolidated Financial Statements

DELTA MUTUAL INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2007

1.	DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Delta Mutual, Inc. and subsidiaries ("Delta" or the "Company") are engaged in providing environmental and construction technologies and services to certain geographic reporting segments in the Far East, the Middle East, the United States and Puerto Rico.

The Company’s environmental activities are conducted by its joint venture subsidiary Delta-Envirotech, Inc. (“Envirotech”) headquartered in Virginia. Envirotech has established a strategic alliance with ZAFF International, Ltd., a technology company in Saudi Arabia, to pursue environmental and other projects in Saudi Arabia and other areas of the Middle East. Envirotech also formed a local joint venture company in Indonesia, PT Triyudha-Envirotech, to perform energy and waste recovery operations in that country.

The Company’s construction technology activities are conducted through its wholly owned U.S., subsidiary, Delta Technologies, Inc (“Technologies”). Technologies acquired the intellectual property rights and filed a patent for a new insulating concrete wall forming (ICF) system known as Delta Wall .

BASIS OF PRESENTATION

The consolidated balance sheet as of June 30, 2007, and the consolidated statements of operations and cash flows for the periods presented herein have been prepared by the Company and are unaudited. In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly, the financial position, results of operations and cash flows for all periods presented have been made.

The consolidated financial statements for the period ended June 30, 2007 have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. Management recognizes that the Company's continued existence is dependent upon its ability to obtain needed working capital through additional equity and/or debt financing and revenue to cover expenses as the Company continues to incur losses.

The Company's business is subject to most of the risks inherent in the establishment of a new business enterprise. The likelihood of success of the Company must be considered in light of the expenses, difficulties, delays and unanticipated challenges encountered in connection with the formation of a new business, raising operating and development capital, and the marketing of a new product. There is no assurance the Company will ultimately achieve a profitable level of operations.

The Company presently does not have sufficient liquid assets to finance its anticipated funding needs and obligations. The Company's continued existence is dependent upon its ability to obtain needed working capital through additional equity and/or debt financing and achieve a level of sales adequate to support its cost structure. Management is actively seeking additional capital to ensure the continuation of its development activities and complete the proposed joint ventures. However, there is no assurance that additional capital will be obtained or that the joint ventures will be profitable. These uncertainties raise substantial doubt about the ability of the Company to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties should the Company be unable to continue as a going concern.

SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The Company's consolidated financial statements include the accounts of all majority-owned subsidiaries where its ownership is more than 50 percent of common stock. The consolidated statements also include the accounts of any Variable Interest Entities ("VIEs") where the Company is deemed to be the primary beneficiary, regardless of its ownership percentage. All significant intercompany balances and transactions with consolidated subsidiaries are eliminated in the consolidated financial statements. Where the Company's ownership interest is less than 100 percent, the outside stockholders’ interest are shown as minority interest. The minority ownership interest of the Company's earnings or loss, net of tax, is classified as "Minority interest in earnings of consolidated subsidiaries" in the consolidated statements of operations.

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

CONCENTRATION OF CREDIT RISK

Financial instruments which potentially subject the Company to concentration of credit risk consist principally of accounts receivable. The Company grants credit to customers based on the customer’s financial condition, without requiring collateral. Exposure to losses on the receivables is principally dependent on each customer’s financial condition. The Company controls its exposure to credit risk through credit approvals.

LOSS PER SHARE

Basic and diluted loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the year. Potential common shares are excluded from the loss per share calculation because the effect would be antidilutive. Potential common shares relate to the convertible debt, stock options and common stock purchase warrants. As of June 30, 2007, there were 15,008,587 potential common shares related to convertible debt and 7,978,000 potential common shares related to stock options. As of June 30, 2006, there were 5,679,867 potential common shares related to convertible debt and 8,778,000 potential common shares related to stock options.

REVENUE RECOGNITION

The Company recognizes revenue in accordance with the guidance contained in SEC Staff Accounting Bulletin No. 104 "Revenue Recognition Financial Statements" (SAB No. 104). Revenue is recognized from the Company's environmental remediation operation as the services are performed over the life of the remediation contracts.

PREACQUISITION COSTS

The Company accounts for costs incurred prior to the date of acquisition of a parcel of real property as preacquisition costs. Preacquisition costs are capitalized if the property was acquired or the acquisition of the property is probable. Capitalized preacquisition costs in excess of recoverable amounts are charged to expense.

EVALUATION OF LONG-LIVED ASSETS

The Company reviews property and equipment and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable in accordance with guidance in Statement of Financial Accounting Standards (SFAS) No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets." If the carrying value of the long-lived asset exceeds the undiscounted amount of the related estimated future cash flows, the asset would be adjusted to its fair value and an impairment loss would be charged to operations in the period identified.

DEPRECIATION AND AMORTIZATION

Property and equipment are stated at cost. Depreciation is provided for by the straight-line method over the estimated useful lives of the related assets.

STOCK-BASED COMPENSATION

The Company has a stock-based compensation plan under which stock options and stock awards are granted to employees. Effective January 1, 2006, the Company accounts for stock based compensation under Statement of Financial Accounting Standards ("SFAS") No. 123(R), "Share-Based Payment." The Company adopted SFAS 123(R) using the modified prospective method. Under modified prospective application, this SFAS applies to new awards and to awards for which the requisite service has not been rendered that are outstanding as of the required effective date shall be recognized as the requisite service is rendered on or after the required effective date. The compensation cost for the portion of awards shall be based on the grant-date fair value of those awards as calculated for either recognition or pro forma disclosures under SFAS 123. Changes to the grant-date fair value of equity awards granted before the required effective date of this Statement are precluded. The compensation cost for those earlier awards shall be attributed to periods beginning on or after the required effective date of this SFAS using the attribution method that was used under SFAS 123, except that the method of recognizing forfeitures only as they occur shall not be continued.

INCOME TAXES

The Company accounts for income taxes using an asset and liability approach under which deferred taxes are recognized by applying enacted tax rates applicable to future years to the differences between financial statement carrying amounts and the tax basis of reported assets and liabilities. The principal item giving rise to deferred taxes are future tax benefits of certain net operating loss carryforwards.

FOREIGN CURRENCY TRANSLATION

The functional currency for some foreign operations is the local currency. Assets and liabilities of foreign operations are translated at balance sheet date rates of exchange and income, expense and cash flow items are translated at the average exchange rate for the period. Translation adjustments in future periods will be recorded in Accumulated Other Comprehensive Income. The translation gains or losses were not material for the six and three months ended June 30, 2007 and 2006.

INTANGIBLES

In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 142 specifies the financial accounting and reporting for acquired goodwill and other intangible assets. Goodwill and intangible assets that have indefinite useful lives are not amortized but rather they are tested at least annually for impairment unless certain impairment indications are identified.

FAIR VALUE OF FINANCIAL INSTRUMENTS

For financial instruments including cash, accounts payable, accrued expenses, and convertible debt, it was assumed that the carrying amount approximated fair value because of the short maturities of such instruments.

RECLASSIFICATIONS

Certain reclassifications have been made to prior period amounts to conform to the current year presentation.

NEW FINANCIAL ACCOUNTING STANDARDS

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements," which enhances existing guidance for measuring assets and liabilities using fair value. This Statement provides a single definition of fair value, together with a framework for measuring it, and requires additional disclosure about the use of fair value to measure assets and liabilities. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company does not believe that SFAS No. 157 will have a material impact on its consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159 (“SFAS No. 159”) “The Fair Value Option for Financial Assets and Financial Liabilities," providing companies with an option to report selected financial assets and liabilities at fair value. The Standard’s objective is to reduce both complexity in accounting for financial instruments and the volatility in earnings caused by measuring related assets and liabilities differently. It also requires entities to display the fair value of those assets and liabilities for which the company has chosen to use fair value on the face of the balance sheet. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of the adoption of this Statement on its consolidated financial statements.

2.	PROPERTY AND EQUIPMENT

	June 30, 2007

Equipment	$	480,035
Leasehold improvements		7,807
		487,842

Less accumulated
Depreciation		72,302

	$	415,540

Depreciation expense for the six and three months ended June 30, 2007 and 2006, amounted to $22,541 and $11,208; and $19,321 and $9,661, respectively.

3.	INTANGIBLE ASSETS

Intellectual property costs are intellectual property included in a patent application. If the patent is not issued, the Company will write-off the unamortized amounts immediately. Other intangibles are being amortized over 20 years. Amortization expense was $3,575 and $1,787; and $3,575 and $1,788 for the six and three months ended June 30, 2007 and 2006, respectively.

Other intangible assets consist of the following:

	June 30, 2007
	Gross Carrying		Accumulated
	Amount		Amortization
Intellectual property costs	$	143,000	$	13,108

	$	143,000	$	13,108

Estimated amortization expense for intangible assets for the next five years is as follows:

	Estimated
	Amortization
Year Ending December 31,	Expense

2007	$	3,575
2008		7,150
2009		7,150
2010		7,150
2011		7,150

2007 represents amortization from July 1, through December 31, 2007.

4.	INVESTMENT IN JOINT VENTURES

In December 2003, the Company formed a joint venture project to develop Section 124, low income housing in the Commonwealth of Puerto Rico. The Company became the general partner and majority owner of a limited partnership, Delta Development Partners, LP, that holds the 85% majority share of Delta Developers Corp., a Puerto Rico corporation, formed to manage the construction and related activities required to build approximately 270 low income homes under Section 124. During the year ended December 31, 2006, the activities associated with this joint venture were discontinued. The operations of the joint venture have been consolidated with the Company for the six and three months ended June 30, 2007 and 2006, respectively.

In October 2004, the Company formed a second joint venture to develop Section 124 low income housing in Puerto Rico. The Company became the general partner and majority owner of a limited partnership, Delta Development Partners II, LP, that holds the 85% majority share of Delta Developers Guayanilla Corp., a Puerto Rico corporation formed to manage the construction and related activities required to build approximately 300 low income homes under Section 124. During the first quarter of 2007, the activities associated with this joint venture were discontinued and the land option deposit was returned to the Company. The operations of the joint venture have been consolidated with the Company for the six and three months ended June 30, 2007 and 2006, respectively.

In November 2006, The Company formed a new joint venture to develop Section 124 housing in Puerto Rico. The Company became the general partner and minority owner of a limited partnership, Delta TA, LP, formed to manage the construction and related activities to build approximately 330 residential units under section 124. The operations of this partnership have been consolidated with the Company since November 2006.

In January 2004, the Company entered into a joint venture agreement with Hi Tech Consulting and Construction, Inc. (”Hi Tech”) forming Delta- Envirotech, Inc. for the purpose of providing environmental technologies and services to markets in the Middle East. The joint venture company is based in Virginia and focuses on participating in foreign government sponsored pollution remediation and other projects.

In July 2004, the Company and Hi Tech, pursuant to an agreement to purchase stock dated January 14, 2004, each sold 75 shares of the joint venture to a third party, representing a ten percent (10%) interest. The Company and Hi-Tech each own forty-five percent (45%) of the joint venture.

The operations of the joint venture have been consolidated with the Company for the six and three months ended June 30, 2007 and 2006. Delta-Envirotech, Inc. meets the definition of a Variable Interest Entity as defined in Financial Accounting Standards Board Interpretation No. 46 (“FIN 46”), "Consolidation of Variable Interest Entities" requiring the primary beneficiaries of a variable interest entity to consolidate that entity. The primary beneficiary of a variable interest entity is the party that absorbs the majority of the expected losses of the entity or receives a majority of the entity's expected residual return, or both, as a result of ownership, contractual or other financial interest in the entity.

c.	Minority interests primarily consist of ownership interest in Delta Development Partners, LP; Delta Development Partners II, LP; Delta TA, LP; Delta Developers Corp.; Delta Developers Guayanilla Corp.; Delta-Envirotech, Inc. and PT Triyudha-Envirotech.

The income and losses from operations of these entities and their respective minority interests have been reflected in the Company's consolidated statements of operations for the six and three months ended June 30, 2007 and 2006. There are excess losses not absorbed by the minority interests due to limitations of their capital contributions. In future periods, the profits first attributable to the minority interests will be first absorbed against any unused losses until the losses are fully absorbed. The amount on the Company's consolidated balance sheet represents the minority interests as of June 30, 2007.

The following represents a schedule of minority interests as of June 30,

	2007

Delta Development Partners LP	$	144,757
Delta Development Partners II, LP		39,634
Delta TA, LP		108,427
Delta Developers Corp.		—
Delta Developers Guayanilla Corp.		—
Delta-Envirotech, Inc.		—
PT Triyudha - Envirotech		—

	$	292,818

5.	NOTES PAYABLE

In April 2005, the Company issued 8% term notes to private investors in the amount of $210,655, with the principal and interest due at maturity on October 2, 2005. Pursuant to note modification agreements, the maturity dates of these notes were extended and in June 2006, became payable on written demand by the lenders. Interest expense for the six and three months ended June 30, 2007 and 2006 amounted to $8,426 and $4,213; and $8,246 and $4,213, respectively. As of June 30, 2007 accrued interest of $29,434 is included in accrued interest expense on the Company's consolidated balance sheet.

6.	CONVERTIBLE DEBT

In September 2004, the Company issued a 6% convertible note to an investor in the principal amount of $60,000, convertible into common stock at $0.05 per share. In September 2006, this note became payable upon written demand by the lender.

In May 2004, The Company issued to two related parties, two 4% convertible notes, in the aggregate principal amount of $322,900, convertible into common stock at $0.125 per share. By subsequent amendments, the maturity dates of these notes have been extended until September 10, 2007 and February 28, 2008. In 2006, one of the noteholders converted $29,160 of the principal amount into shares of common stock. At June 30, 2007, the principal amount of these two notes was $293,740.

On May 3, 2006, the Company issued a convertible note to a related party in the principal amount of $16,000. The note bears interest at 6% per annum and matures on November 3, 2007. The note is convertible into common stock at a conversion price of $0.06 per share, the fair value at the date of issuance.

During the first quarter of 2007, the Company issued a convertible note to a related party in the principal amount of $17,000, and a convertible note to an investor in the principal amount of $266,000. Both notes bear interest of 6% per annum and are convertible into common stock at an initial conversion price of $0.05 per share, the fair at the date of issuance. The notes mature in April 2008. In conjunction with the issuance of these two notes, the Company reclassified $266,000 recorded as deferred stock purchase, on its consolidated balance sheet as of December 31, 2006, to convertible notes at March 31, 2007.

In April 2007, the Company issued a convertible note to a related party in the principal amount of $26,600 bearing interest of 6% per annum and convertible into common stock at the initial conversion price of $0.05 per share, the fair value at the date of issuance. The note matures in April 2008.

In May 2007, the Company borrowed $250,000 from an investor pursuant to the terms of a convertible promissory note in the aggregate principal amount of $550,000. The note bears interest of 10% per annum and is convertible into common stock at an initial conversion price of $0.05 per share, the fair value at the date of issuance. The maturity date for the amount borrowed is May 2008.

The following table shows the maturities by year of total face amount of the long-term convertible debt obligations at June 30, 2007:

2007	$	269,740
2008		659,600
		929,340

For the six and three months ended June 30, 2007 and 2006, the Company recorded interest expense of $26,464 and $19,481; and $23,543 and $11,604, respectively. In March 2007, the Company paid $13,880 of accrued interest to a convertible noteholder by issuing 111,040 shares of common stock. As of June 30, 2007, accrued interest of $75,862 is included in accrued expenses on the Company's consolidated balance sheet.

7.	ACCRUED EXPENSES

Accrued expenses consist of the following:

	June 30
	2007

Professional fees	$	8,105
Interest expense		75,862
Payroll Expense		407,320
Payroll expense officers		121,499
Payroll tax expense		36,147
Other accrued expenses		334,109

	$	983,042

8.	LOANS FROM RELATED PARTIES

In March 2005, the Company borrowed $71,731 from a shareholder of the Company, with interest at 6% per annum and the principal and interest due in three equal installments in 2005. The note was amended in December 2005 extending the final installment payment to February 20, 2006. On February 3, 2006, the Company made the final payment consisting of $23,910 of principal and$1,563 of accrued interest. Interest expense for the six and three months ended June 30, 2007 and 2006 amounted to $-0- and $-0-; and $-0- and $287, respectively.

On May 17, 2006, the Company borrowed $30,000 from a shareholder of the Company, at interest of 6% per annum with the principal and interest due on May 17, 2008. Interest expense for the six and three months ended June 30, 2007 and 2006 amounted to $900 and $450; and $222 and $222, respectively. The balance due to the shareholder is included in Notes Payable on the Company's consolidated balance sheet at June 30, 2007. Accrued interest of $2,022 in included in accrued expenses on the Company’s consolidated balance sheet at June 30, 2007.

9.	OTHER RELATED PARTY TRANSACTIONS

The Company's Envirotech subsidiary pays monthly office rent to David Razmara, the president of Envirotech and a shareholder of the Company, in the amount of $1,000. The rent expense for the six and three months ended June 30, 2007 and 2006 amounted to $6,000 and $3,000, respectively.

10.	STOCKHOLDERS' DEFICIENCY

The Company issues shares of common stock for services and repayment of debt and interest at fair market value at time of issuance.

For the six months ended June 30, 2007, the Company issued 111,040 shares of common stock in payment of accrued interest valued at $0.125 per share.

11.	BUSINESS SEGMENT INFORMATION

The Company operates in four reportable segments. The segments are geographic and include the Far East (Indonesia), the Middle East, North America (United States) and Puerto Rico. The primary criteria by which financial performance is evaluated and resources allocated are revenue and operating income.

The following is a summary of key financial data:

	Six Months ended June 30						Three Months ended June 30,
	2007			2006			2007			2006

Total Revenue:

North America	$	—			—		$	—		$	—
Indonesia		—		$	260,704			—			99,982
Middle East		—			—			—			—
Puerto Rico		—			—			—			—

	$	—		$	260,704		$	—		$	99,982


Operating Loss:

North America	$	(1,221,001	)	$	(1,077,311	)	$	(705,324	)	$	(540,283	)
Indonesia		(18,975	)		75,319			(9,987	)		25,705
Middle East		(10,000	)		(29,400	)		(5,000	)		(14,700	)
Puerto Rico		(25,501	)		(151,038	)		(13,231	)		(20,722	)

	$	(1,275,477	)	$	(1,182,430	)	$	(733,542	)	$	(550,000	)

12.	SHARE BASED COMPENSATION

On January 1, 2006, the Company adopted SFAS No. 123(R) "Share-Based Payment," requiring the recognition of compensation expense in the Consolidated Statements of Operations related to the fair value of its employee share-based options and awards. SFAS No. 123(R) revised SFAS No. 123 "Accounting for Stock-Based Compensation" and supercedes APB Opinion No. 25 "Accounting for Stock Issued to Employees." SFAS No. 123(R) is supplemented by SEC Staff Accounting Bulletin ("SAB") No. 107 "Share-Based Payment." SAB No. 107 expresses the SEC staff's views regarding the interaction between SFAS No. 123(R) and certain SEC rules and regulations including the valuation of share-based payment arrangements.

The Company recognizes the cost of all employee stock options on a straight-line attribution basis over their respective vesting periods, net of estimated forfeitures. The Company has selected the modified prospective method of transition; accordingly, prior periods have not been vested. Prior to adopting SFAS No. 123(R), the Company applied APB Opinion No. 25, and related interpretation in accounting for its stock-based compensation plans. All employee stock options were granted at or above the grant date market price. Accordingly, no compensation cost was recognized for fixed stock option grants.

At June 30, 2007, the Company had one share-based compensation plan, which is described below. During the six and three months ended June 30, 2007 and 2006, the adoption of SFAS No.123(R) resulted in incremental stock-based compensation expense of $393,490 and $196,745; and $292,500 and $146,250, respectively. The incremental stock-based compensation expense caused earnings before provision for income taxes and net earnings to decrease by $393,490 and $196,745; and $295,500 and $146,250, respectively, and basic and diluted earnings per common share to decrease by $0.01 per share.

The Company also issues shares of its common stock to non-employees as stock based compensation. The Company accounts for the services using the fair market value of the services rendered. For the six and three months ended June 30, 2007, the Company did not issue any shares of common stock to non-employees for services rendered. During the six and three months ended June 30, 2006, the Company issued 1,490,152 shares, and recorded expense of $307,841 in conjunction with the issuance of those shares, of which $250,000 was included in prepaid expenses on the consolidated balance sheet at June 30, 2006.

Stock Option Plan

In December 2001, the Company's stockholders approved a stock option plan entitled the 2001 Employee Stock Option Plan (the "2001 Plan"), pursuant to which 2,000,000 shares of common stock were reserved for issuance. In August 2004, the Company's stockholders approved the 2004 Stock Option Plan (the "2004 Plan"), pursuant to which 10,000,000 shares of common stock were reserved for issuance. As of June 30, 2007, all shares under the 2001 Plan had been issued, and 2,022,000 shares of common stock remained available for issuance under the 2004 Plan.

The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants in 2006: dividends yield of 0%, expected volatility of 116% and expected life of 5 years.

During the six and three months ended June 30, 2007, the Company did not issue any stock options. During the six and three months ended June 30, 2006, the Company issued 778,000 stock options to five employees and recorded an expense of $64,145.

A summary of option activity under the 2004 Plan as of December 31, 2006 and changes during the six months ended June 30, 2007 is presented below:

					Weighted
					Average
			Weighted		Remaining		Aggregate
			Average		Contractual		Intrinsic
Options	Shares		Exercise Price		Term		Value

Outstanding at January 1, 2007:		7,978,000	$	0.11
Granted		—		—
Exercised		—		—
Forfeited, expired or cancelled:		—		—

Outstanding at June 30, 2007		7,978,000	$	0.11		4.0	$	(319,120	)

Exercisable at June 30, 2007		3,908,940	$	0.11		4.0	$	(156,358	)

A summary of the status of the Company's non vested options as of December 31, 2006 and changes during the six months ended June 30, 2007 is presented below:

			Weighted-Average
			Grant-Date
Nonvested Options	Options		Fair Value

Nonvested at January 1, 2007:		4,069,060	$	0.11
Granted		—		—
Vested		—		—
Forfeited, expired or cancelled:		—		—

Nonvested at June 30, 2007		4,069,060	$	0.11

At June 30, 2007, there was $1,802,760 of total unrecognized compensation cost related to non vested share-based compensation arrangements granted under the 2004 Plan. The cost is expected to be recognized over a weighted average period of 4.0 years.

13.	COMMITMENTS AND CONTINGENCIES

Consulting Agreements

In August 2005, the Company entered into a consulting agreement with Juan B. Rodriguez Pagan ("Rodriguez") to provide certain services and assistance to the Company in developing its construction and building materials businesses.

For the six months ended June 30, 2007, consulting fees of $62,720 are included in accrued expenses on the Company's consolidated balance sheet. For the six and three months ended June 30, 2007 and 2006, the Company expensed $94,500 and $47,250; and $94,500 and $47,250, respectively, in consulting fees in conjunction with the issuance of common stock to Rodriguez.

By written notice, the Company terminated this agreement effective June 2, 2007, and informed Rodriguez that the reason for termination was because he had violated certain provisions of the agreement. In conjunction with the termination, the Company recorded a one-time charge of $248,000.

In August 2005, Delta Technologies, Inc., a wholly-owned subsidiary of the Company , entered into a consulting agreement with Richard F. Straub, Jr. ("Straub") for a period of three years, to provide ongoing technical assistance and support in the production of insulating concrete wall forming products.

For the six and three months ended June 30, 2007 and 2006, consulting fees of $26,400 and $13,200; and $26,400 and $13,200, respectively have been expensed. For the six months ended June 30, 2007, $41,667 of the stock value associated with the issuance of shares to Straub, is included in accrued expenses on the Company's consolidated statements of operations and consolidated balance sheet, respectively.

14.	INCOME TAXES

The Company adopted the provisions of Financial Accounting Standards Board Interpretation No. 48 “Accounting for Uncertainties in Income Taxes,” (“FIN 48”) on January 1, 2007. As a result of the implementation of FIN 48, the Company recognized no adjustments in the net liability for unrecognized income tax benefits.

15.	SUBSEQUENT EVENTS

I n July 2007, the Company received $150,000 from an investor pursuant to the terms of a convertible promissory note in the aggregate principal amount of $550,000 dated May 1, 2007 (the “Note”). The Company has not received the balance of $150,000 due from the investor pursuant to the Note.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and notes thereto and other financial information included elsewhere in this report.

Certain statements contained in this report, including, without limitation, statements containing the words "believes," "anticipates," "expects" and words of similar import, constitute "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including our ability to create, sustain, manage or forecast our growth; our ability to attract and retain key personnel; changes in our business strategy or development plans; competition; business disruptions; adverse publicity; and international, national and local general economic and market conditions.

We were incorporated in the State of Delaware on November 17, 1999 and will require additional capital to execute our current and planned business operations.

RESULTS OF OPERATIONS

During the six months ended June 30, 2007, we incurred a net loss of $1,349,766, because we had no revenue to offset operating expenses. Our ability to continue as a going concern is dependent upon our ability to obtain funds to meet our obligations on a timely basis, obtain additional financing or refinancing as may be required, and ultimately to attain profitability. There are no assurances that we will be able to obtain any additional financing or, if we are able to obtain additional financing, that such financing will be on terms favorable to us. The inability to obtain additional financing when needed would have a material adverse effect on our operating results.

THREE MONTHS ENDED JUNE 30, 2007 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2006.

The net loss increased by approximately $122,000 from $642,082 for the three months ended June 30, 2006 to approximately $764,000 for the three months ended June 30, 2007.

General and administrative expenses for the three months ended June 30, 2007 increased approximately $113,000 over the comparable period in the prior year. However, ongoing general and administrative expenses decreased by approximately $161,000 from the prior year period, which was offset by a one-time, non-cash charge of $248,000 associated with the termination of a consulting agreement.

SIX MONTHS ENDED JUNE 30, 2007 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2006.

The net loss decreased by approximately $95,000 from $1,444,783 for the six months ended June 30, 2006 to $1,349,766 for the six months ended June 30, 2007.

General and admistrative expenses for the six months ended June 30, 2007 decreased approximately $88,000 from the comperable period in 2006. Ongoing general and administrative expenses decreased approximately $336,000 from the prior year period, offset by a one-time, non-cash charge of $248,000. The other items of significant decrease in the six months ended June 30, 2007 over the comparable period of the prior year were a decrease in accretion of convertible debt of approximately $147,000 and a decrease in our share of the losses of our consolidated subsidiaries of approximately $44,000.

The Company has established a wholly-owned subsidiary, a joint venture subsidiary and a limited partnership, primarily to establish business operations focused on providing environmental and construction technologies and services in the Far East, the Middle East, the United States and Puerto Rico.

Our environmental remediation operations are carried out through Delta-Envirotech, Inc., a joint venture company formed in January 2004, with Hi Tech Consulting and Construction, Inc., to provide environmental technology and other services for certain business segments located in the Far East and the Middle East. We have operating control of, and a forty-five percent ownership interest in, Delta-Envirotech. We have entered into strategic alliance agreements with several United States-based entities with technologies and products in the environmental field to support the Company's worldwide activities.

Our construction technology activities are carried out by Delta Technologies, Inc. (our wholly owned subsidiary) and focused on the United States construction industry but are equally well suited for use in Puerto Rico and internationally.

Far East (Indonesia)

In Indonesia, we formed a local joint venture company to commence energy and waste recovery operations. The joint venture company, PT Triyudha-Envirotech, began operations in December 2005, pursuant to a contract with Pertamina, the government owned oil company. The initial contract that required us to process 3,000 metric tons of oil sludge was successfully completed in October 2006. In January 2007, we began negotiating a second contract to process an unlimited amount of oil sludge over a 12-month period at the same refinery. We have experienced unexpected delays in the negotiations and now expect them to be concluded during the third quarter.

In 2004, we entered into a strategic alliance agreement between our environmental remediation joint venture, Delta-Envirotech, Inc. ("Envirotech"), and ZAFF International, Ltd., to jointly pursue environmental and other projects in the Middle East.

In August 2005, we reached a working agreement to provide equipment to manufacture insulating concrete form (ICF) products for the building industry in Saudi Arabia. In September 2006, Envirotech received a letter of intent from a purchaser.

On March 8, 2007, Envirotech received the purchase agreement to supply the equipment and services for the factory in Saudi Arabia. This is our first contract in Saudi Arabia and our largest to date, valued at $3,369,000.

The equipment specified in the agreement consists of several ICF technologies including the machinery that produces our Delta Wall system. The agreement requires payment by letter of credit in four installments. We currently anticipate that the letter of credit will be opened during the third quarter of 2007 and that the final payment will be received in the second quarter of 2008.

During July and August 2006, we announced that Envirotech expanded its product line by securing the master distribution rights for the Middle East for environmentally friendly organic emulsifiers used to clean oil wells and oil storage tanks, as well as a gas-imaging product used in oilfield and refining operations. The organic emulsifiers are used in combination with a centrifuge. A demonstration centrifuge has been fabricated in the US and is scheduled to be shipped to Saudi Arabia in August. Once the demonstration unit is in place, testing of these products will be conducted for ARAMCO, the Saudi government oil company. The gas-imaging product is still under evaluation by ARAMCO.

Over the past nine months, Envirotech has been working with the operators of oil sludge processing facilities in Bahrain and Kuwait to improve the processing technology currently in use. The operators have agreed to evaluate new processing equipment provided through Envirotech. We expect to ship the demonstration unit, that will be evaluated on site by the respective operators, during the third quarter.

In August 2005, Delta Technologies, Inc. acquired certain intellectual property and filed a patent application for a new insulating concrete wall forming (ICF) system, now know as Delta Wall .

Production of the Delta Wall blocks began in September 2006. An independent testing laboratory was hired in January 2007 to evaluate the blocks for the purpose of applying for International Commercial Code (ICC) approval. We still require independent structural engineering evaluations to complete the testing and evaluation necessary for ICC approval.

In November 2006, we formed a new limited partnership to acquire a suitable parcel of land for a new housing development approved for Section 124 housing and zoned for residential construction. In January 2007, we secured an option on a 13-acre tract in Toa Alta that met these requirements. During the subsequent discussions with our bank to obtain financing to acquire the property and begin construction of the first phase of the project, the bank informed us that it will not provide financing for a Section 124 project on the proposed site. However, the bank has indicated that it will consider financing a moderate income development with fewer and larger housing units. Since this would require substantial changes to the project as originally conceived, we are in discussions with our limited partner regarding whether or not to proceed with a redesigned project.

We are currently dependent on equity investments or borrowing from private investors to pay our operating expenses. There are no assurances that such investors will continue to advance funds or invest in the Company's securities. In the event we are unable to obtain additional capital or funding we may be unable to pursue our business plans. We anticipate that we will be required to raise capital in an amount up to $450,000 during the remaining two quarters of this fiscal year in order to continue to fund our current activities and to finance our planned business operations.

We have generated limited revenue from our current operations. We must rely primarily on private placements of Company stock or debt to pay operating expenses.

At June 30, 2007 we had a working capital deficit of $2,318,560, an increase of $1,003,342 in our working capital deficit compared with the close of the second quarter of 2006. This increase for the period ended June 30, 2007 is a result of a decrease in accounts receivable and prepaid expenses and an increase in accrued expenses and convertible debt,

partially offset by a decrease in accounts payable. Since we have limited sources of revenue, we expect a working capital deficit until our revenue is sufficient to cover our operating expenses.

In the six months ended June 30, 2007, we reclassified $266,000 of stock purchase deposits to convertible debt, borrowed $43,600 from a stockholder of the Company and borrowed $250,000 from an investor. In July 2007, we borrowed an additional $150,000 from an investor, pursuant to the terms of a convertible promissory note dated May 1, 2007.

At June 30, 2007, we had total assets of $615,635, compared to total assets of $1,329,134 at June 30, 2006. The decrease in total assets as of June 30, 2007 was due to a decrease in all classes of current assets, particularly accounts receivable and prepaid expenses and a modest decrease in fixed assets.

CRITICAL ACCOUNTING ISSUES

The Company's discussion and analysis of its financial condition and results of operations are based upon the Company's financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of the financial statements requires the Company to make estimates and judgments that affect the reported amount of assets, liabilities, and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to intangible assets, income taxes and contingencies and litigation. The Company bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements," which enhances existing guidance for measuring assets and liabilities using fair value. This Standard provides a single definition of fair value, together with a framework for measuring it, and requires additional disclosure about the use of fair value to measure assets and liabilities. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company does not believe that SFAS No. 157 will have a material impact on its consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159 "The Fair Value Option for Financial Assets and Financial Liabilities," providing companies with an option to report selected financial assets and liabilities at fair value. The Standard's objective is to reduce both complexity in accounting for financial instruments and the volatility in earnings caused by measuring related assets and liabilities differently. It also requires entities to display the fair value of those assets and liabilities for which the Company has chosen to use fair value on the face of the balance sheet. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of the adoption of this Statement on its consolidated financial statements.

FOREIGN CURRENCY TRANSLATION

The functional currency for some foreign operations is the local currency. Assets and liabilities of foreign operations are translated at balance sheet date rates of exchange and income, expense and cash flow items are translated at the average exchange rate for the period. Translation adjustments in future periods will be recorded in Other Comprehensive Income. The translation gains or losses were not material for the year ended December 31, 2006.

GOODWILL AND OTHER INTANGIBLES

Quantitative and Qualitative Disclosures About Market Risk

Fair Value of Financial Instruments - The following disclosure of the estimated fair value of financial instruments is made in accordance with the requirements of Statement of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments". The estimated fair values of financial instruments have been determined by the Company using available market information and appropriate valuation methodologies.

However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange.

The Company has not entered into, and does not expect to enter into, financial instruments for trading or hedging purposes. The Company does not currently anticipate entering into interest rate swaps and/or similar instruments.

The Company's carrying values of cash, marketable securities, accounts receivable, accounts payable and accrued expenses are a reasonable approximation of their fair value.

ITEM 3. CONTROLS AND PROCEEDURES

Disclosure controls and procedures.

As of the end of the Company's most recently completed fiscal quarter (the fourth fiscal quarter in the case of an annual report) covered by this report, the Company carried out an evaluation, with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-15. Based upon that evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms.

Changes in internal controls over financial reporting.

There have been no changes in the Company's internal controls over financial reporting that occurred during the Company's last fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II - OTHER INFORMATION

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

(a) On April 16, 2007, our board of directors approved an amendment to our Certificate of Incorporation to provide for an increase of the number of shares of Common Stock that the Company is authorized to issue from 100,000,000 to 250,000,000 . Stockholder approval for the amendment to our Certificate of Incorporation was obtained by written consent on May 15, 2007, from stockholders holding a majority of the issued and outstanding shares.

(b) Stockholders holding 32,965,811 shares of our common stock, or 52.94%, of the 62,272,286 then issued and outstanding shares of our common stock approved the proposal to amend the Certificate of Incorporation to increase the number of authorized shares of common stock:

					Abstentions/
Proposal	Shares in Favor		Shares Against		Broker Nonvotes

Increase authorized common stock		32,965,811		—		—

ITEM 5. OTHER INFORMATION

As of August 26, 2005, we entered into a consulting services agreement with Juan Bautista Rodriguez Pagan, to assist us in developing our construction and construction materials businesses. We have terminated this agreement by notice dated May 3, 2007. Under the consulting agreement, which was originally for a term of four years, Mr. Rodriguez was to receive monthly payments of $6,000 each; shares of restricted common stock upon entering into the agreement and at defined intervals thereafter; and commissions based on the gross sales of Delta Technologies, Inc., our subsidiary that conducts our construction materials business. Mr. Rodriguez was issued 1,851,092 restricted shares our common stock, and was to be issued certain additional restricted shares of our common stock. We have made monthly cash payments of approximately $30,000 to Mr. Rodriguez under this agreement and no commission payments. We have advised Mr. Rodriguez that the reason for termination was because he has been in violation of certain provisions of the agreement.

3.1c		Certificate of Amendment to Certificate of Incorporation, filed June 26, 2007.

3.1d		Form of Restatement of Certificate of Incorporation of Delta Mutual, Inc., as amended.

4.6e		Amendment, dated April 4, 2007, to 4% Convertible Promissory Note in the principal amount of $193,740.

31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

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


	DELTA MUTUAL, INC.

	BY:	/s/ Peter F. Russo
		Peter F. Russo
		President and Chief Executive Officer

Dated: August 10, 2007

3.1c		Certificate of Amendment to Certificate of Incorporation, filed June 26, 2007.

3.1d		Form of Restatement of Certificate of Incorporation of Delta Mutual, Inc., as amended.

4.6e		Amendment, dated April 4, 2007, to Convertible Promissory Note in the principal amount of $193,740.

31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

CERTIFICATE OF AMENDMENT

CERTIFICATE OF INCORPORATION

Pursuant to Section 242 of the General Corporation Law of the State of Delaware, Delta Mutual, Inc. (the “corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware, does hereby certify:

FIRST: That the Board of Directors of the corporation on April 16, 2007, adopted resolutions proposing and declaring advisable the following amendment to the Certificate of Incorporation of the corporation:

RESOLVED, that the Board of Directors declares advisable, and recommends to the stockholders for adoption, the following amended Fourth Article to replace, in its entirety, the Fourth Article of the corporation’s Certificate of Incorporation:

FOURTH: The total number of shares of stock which the corporation shall have authority to issue is Two Hundred Fifty Million (250,000,000) shares of Common Stock, having a par value each of One-hundredth of One Cent ($0.0001) per share.

SECOND: That the amendment was fully approved and adopted by the affirmative written consent of the majority of shares outstanding, in accordance with the provisions of Sections 211 and 216 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, the corporation has caused this Certificate of Amendment of Certificate of Incorporation to be signed by its President this 26th day of June 2007.


	Delta Mutual, Inc.

	By:	/s/ Peter F. Russo
		Peter F. Russo President

CERTIFICATE OF INCORPORATION

The undersigned, a natural person, for the purpose of organizing a corporation for conducting the business and promoting the purposes hereinafter stated, under the provisions and subject to the requirements of the laws of the State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the acts amendatory thereof and supplemental thereto, and known, identified, and referred to as the "General Corporation Law of the State of Delaware"), hereby certifies that:

FIRST: The name of the corporation (hereinafter called the "corporation") is Delta Mutual, Inc.

SECOND: The address, including street, number, city, and county, of the registered office of the corporation in the State of Delaware is 1013 Centre Road, City of Wilmington 19805, County of New Castle; and the name of the registered agent of the corporation in the State of Delaware at such address is Corporation Service Company.

THIRD: The nature of the business and purposes to be conducted and promoted by the corporation are as follows: to conduct a mortgage company. To conduct any lawful business, to promote any lawful purpose, and to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

FIFTH: The name and the mailing address of the incorporator are as follows:

NAME	MAILING ADDRESS

Charles G. Youngblood	4 Tower Place Albany, New York 12203

SIXTH: The corporation is to have perpetual existence.

SEVENTH: Whenever a compromise or arrangement is proposed between this corporation and its creditors or any class of them and/or between this corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this corporation under Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this corporation under Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this corporation, as the case may be, and also on this corporation.

EIGHTH: For the management of the business and for the conduct of the affairs of the corporation, and in further definition, limitation, and regulation of the powers of the corporation and of its directors and of its stockholders or any class thereof, as the case may be, it is further provided:

1. The management of the business and the conduct of the affairs of the corporation shall be vested in its Board of Directors. The number of directors which shall constitute the whole Board of Directors shall be fixed by, or in the manner provided in, the Bylaws. The phrase "whole Board" and the phrase "total number of directors" shall be deemed to have the same meaning, to wit, the total number of directors which the corporation would have if there were no vacancies. No election of directors need be by written ballot.

2. After the original or other Bylaws of the corporation have been adopted, amended, or repealed, as the case may be, in accordance with the provisions of Section 109 of the General Corporation Law of the State of Delaware, and, after the corporation has received any payment for any of its stock, the power to adopt, amend, or repeal the Bylaws of the corporation may be exercised by the Board of Directors of the corporation; provided, however, that any provision for the classification of directors of the corporation for staggered terms pursuant to the provisions of subsection (d) of Section 141 of the General Corporation Law of the State of Delaware shall be set forth in an initial Bylaw or in a Bylaw adopted by the stockholders entitled to vote of the corporation unless provisions for such classification shall be set forth in this certificate of incorporation.

3. Whenever the corporation shall be authorized to issue only one class of stock, each outstanding share shall entitle the holder thereof to notice of, and the right to vote at, any meeting of stockholders. Whenever the corporation shall be authorized to issue more than one class of stock, no outstanding share of any class of stock which is denied voting power under the provisions of the certificate of incorporation shall entitle the holder thereof to the right to vote at any meeting of stockholders except as the provisions of paragraph (2) of subsection (b) of Section 242 of the General Corporation Law of the State of Delaware shall otherwise require; provided, that no share of any such class which is otherwise denied voting power shall entitle the holder thereof to vote upon the increase or decrease in the number of authorized shares of said class.

NINTH: The personal liability of the directors of the corporation is hereby eliminated to the fullest extent permitted by the provisions of paragraph (7) of subsection (b) of Section 102 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented.

TENTH: The corporation shall, to the fullest extent permitted by the provisions of Section 145 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said Section from and against any and all of the expenses, liabilities, or other matters referred to in or covered by said section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such person.

ELEVENTH: From time to time any of the provisions of this certificate of incorporation may be amended, altered, or repealed, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted in the manner and at the time prescribed by said laws, and all rights at any time conferred upon the stockholders of the corporation by this certificate of incorporation are granted subject to the provisions of this Article ELEVENTH.

Signed on November 17th, 1999.


		/S/ Charles G. Youngblood
		Charles G. Youngblood, Incorporator

4% CONVERTIBLE PROMISSORY NOTE

FIFTH AMENDMENT, dated as of April 4, 2007, TO 4% CONVERTIBLE PROMISSORY NOTE, dated May 12, 2004, made by and between Delta Mutual, Inc., a Delaware corporation, with its principal offices located at 111 North Branch Street, Sellersville, PA 18960 (the “Borrower”) and Neil Berman, an individual, of 21346 St. Andrews Boulevard, # 421, Boca Raton, FL 33433 (the “Holder”). Capitalized terms used herein and not otherwise defined herein shall have the meaning assigned to such term in the Original Note.

WHEREAS, the Borrower and the Holder are parties to that certain 4% Convertible Promissory Note, dated May 12, 2004, as amended , (the “Original Note”) pursuant to which the Borrower has borrowed the amount of $193,740 from the Holder;

WHEREAS, the Original Note provides that the Maturity Date shall be April 10, 2007; and

WHEREAS, the Borrower and the Holder have agreed to extend the Maturity Date and to amend Section 1.6 of the Original Note in order to provide the Borrower with additional time to secure financing; and

WHEREAS, in accordance with the terms and conditions of the Original Note, the Borrower and the Holder hereby approve the amendment of the Original Note as set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, the parties agree as follows:

1. By their respective execution of this AMENDMENT, the Borrower and the Holder agree that Section 1.6 of the Original Note is hereby amended to read in its entirety as follows: “Maturity Date” shall mean September 10, 2007.

2. Except as expressly provided herein, the Original Note shall continue in full force and effect.

3. This FIFTH AMENDMENT supercedes any and all prior written or oral agreements with respect to the Original Note, and may be executed by facsimile and in counterparts, which, taken together, shall be deemed an original and shall constitute a single AMENDMENT.

SIGNATURE PAGE FOLLOWS

IN WITNESS WHEREOF, the Borrower and the Holder have executed this Fifth Amendment as of the date first written above.

DELTA MUTUAL INC. (BORROWER)			NEIL BERMAN (HOLDER)
By: /s/ Peter Russo			By: /s/ Neil Berman
Peter F. Russo President & CEO			Neil Berman

I, Peter F. Russo, Chief Executive Officer of Delta Mutual, Inc. (the "Company"), certify that:

1.	I have reviewed this quarterly report on Form 10-QSB of Delta Mutual, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4.	The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the small business issuer and have:

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and

The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):

(a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and

(b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.


Date: August 10, 2007		/s/ Peter F. Russo
		Peter F. Russo Chief Executive Officer

I, Martin G. Chilek, Chief Financial Officer of Delta Mutual, Inc. (the "Company"), certify that:

1.	I have reviewed this quarterly report on Form 10-QSB of Delta Mutual, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4.	The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the small business issuer and have:

(b)

(c)

(d)

(a)

(b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.


Date: August 10, 2007		/s/ Martin G. Chilek
		Martin G. Chilek Chief Financial Officer

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Delta Mutual, Inc. (the "Company") on Form 10-QSB for the quarter ended June 30, 2007 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Peter F. Russo, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.


		/s/ Peter F. Russo
		Peter F. Russo President and Chief Executive Officer

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Delta Mutual, Inc. (the "Company") on Form 10-QSB for the quarter ended June 30, 2007 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Martin G. Chilek, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.


		/s/ Martin G. Chilek
		Martin G. Chilek Chief Financial Officer

August 10, 2007