x |
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE
ACT OF 1934. For the fiscal year ended December 31,
2007.
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o |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE
ACT OF 1934
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DELAWARE
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14-1818394
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|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
|
incorporation
or organization)
|
Identification
No.)
|
· |
Currency
fluctuations;
|
·
|
Changes
in tariffs and taxes;
and
|
·
|
Political
and economic
instability.
|
High
|
Low
|
|||||||||
2006:
|
1st
Quarter
|
0.32
|
0.10
|
|||||||
2nd
Quarter
|
0.12
|
0.06
|
||||||||
3rd
Quarter
|
0.45
|
0.10
|
||||||||
4th
Quarter
|
0.25
|
0.10
|
||||||||
2007:
|
1
st
Quarter
|
0.16
|
0.04
|
|||||||
2
nd
Quarter
|
0.12
|
0.04
|
||||||||
3
rd
Quarter
|
0.08
|
0.04
|
||||||||
4
th
Quarter
|
0.06
|
0.02
|
||||||||
2008:
|
1
st
Quarter
|
0.07
|
0.01
|
(a)
|
(b)
|
(c)
|
||||||||
Plan category
|
Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights
|
Weighted-average exercise
price of outstanding
options, warrants and
rights
|
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))
|
|||||||
Equity compensation plans approved
by security holders
|
7,978,000
|
$
|
0.11
|
2,022,000
|
||||||
Equity
compensation plans not approved by security holders
|
||||||||||
Total
|
7,978,000
|
$
|
0.11
|
2,022,000
|
Date
|
|
Title and Amount
|
|
Purchasers
|
|
Principal
Underwriter
|
|
Total Offering
Price/Underwriting
Discounts
|
|
February 15,
2005
|
45,000
shares of common stock
|
Consultant
|
NA
|
$19,125/NA
|
|||||
December
12, 2005
|
45,000
shares of common stock
|
Consultant
|
NA
|
$12,870/NA
|
|||||
November
14, 2006
|
335,000
shares of common stock
|
Consultant
|
NA
|
$50,250/NA
|
|||||
December
15, 2006
|
1,120,000
shares of common stock issued upon conversion of a promissory note
in
principal amount of $50,000 (including accrued interest)
|
Private
Investor
|
NA
|
$56,000/NA
|
NAME
|
AGE
|
TITLE(S)
|
||
Peter
F. Russo
|
65
|
President,
CEO, Assistant Secretary
and
Director
|
||
Martin
G. Chilek
|
57
|
Sr.
Vice President, Chief
Financial
Officer, Treasurer and Secretary
|
Name
and
Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive
Plan
Compensation
($)
|
Change in
Pension
Value and
Nonquali-
fied Deferred
Compensation
Earnings
($)
|
All
Other
Compen-
Sation
|
Total
($)
|
|||||||||||||||||||
Peter
F. Russo, President and CEO (1)
|
2007
|
$
|
97,500
|
$
|
97,500
|
|||||||||||||||||||||||
Peter
F.
Russo,
|
2006
|
$
|
87,750
|
$
|
41,516
|
$
|
129,266
|
|||||||||||||||||||||
Martin
G. Chilek, Chief Financial Officer
|
2007
|
$
|
91,000
|
$
|
91,000
|
|||||||||||||||||||||||
Martin
G. Chilek, Chief Financial Officer
|
2006
|
$
|
86,500
|
$
|
28,966
|
$
|
115,466
|
|||||||||||||||||||||
Jerome
Kindrachuk, Vice President
|
2006
|
$
|
54,000
|
$
|
88,262
|
(2)
|
$
|
142,262
|
(1)
|
Mr.
Russo is also the sole director of the Company but receives no additional
compensation for serving in that
capacity.
|
(2) |
Upon
the termination of Mr. Kindrachuk’s employment with the Company in
December 2006,
he
received $88,262 of his accrued salary from 2003 and
2004.
|
Option
Awards
|
Stock
Awards
|
|||||||||||||||||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number
of
Shares
or Units
of
Stock
That
Have
Not
Vested
(#)
|
Market
Value
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
($)
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)
|
Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($)
|
|||||||||||||||||||
Peter
F. Russo
|
2,850,000
|
-0-
|
-0-
|
$
|
0.11
|
July 2011
|
||||||||||||||||||||||
Martin
G. Chilek
|
2,000,000
|
-0-
|
-0-
|
$
|
0.11
|
July 2011
|
Number of Shares Owned
|
Percentage**
|
||||||
Beneficially
|
|||||||
Peter
F. Russo (1)
|
2,950,000
|
1.33
|
%
|
||||
Martin
G. Chilek (2)
|
2,050,000
|
0.92
|
%
|
||||
All
Officers and Directors as a Group
|
5,000,000
|
2.25
|
%
|
||||
Egani,
Inc. (3)
|
130,000,000
|
59.14
|
%
|
||||
GZSZ
(4)
|
11,000,000
|
5.00
|
%
|
Exhibit
No.
|
Description
of Exhibits
|
|
3.1
|
Articles
of Incorporation of the Company, as currently in effect, incorporated
herein by reference to Exhibit 3.1 to Amendment No. 1 to the
Company's
Registration Statement on Form 10-SB filed with the Commission
on June 15,
2000.
|
|
3.1a
|
Amendment
to Certificate of Incorporation, filed September 1, 2004. Incorporated
herein by reference to Exhibit 3.1a to the Company's Current
Report on
Form 8-K, filed with the Commission on September 3,
2004.
|
|
3.1b
|
Form
of Restatement of Certificate of Incorporation of Delta Mutual,
Inc., as
amended. Incorporated herein by reference to Exhibit 3.1b to
the Company's
Quarterly Report on Form 10-QSB, filed with the Commission
on November 15,
2004.
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|
3.2
|
By-Laws
of the Company. Incorporated herein by reference to Exhibit
3.2 to
Amendment No. 1 to the Company's Registration Statement on
Form 10-SB
filed with the Commission on June 15, 2000.
|
|
3.2a
|
Amendment
to Article III, Section I of the By-Laws. Incorporated herein
by reference
to the Company's quarterly report on Form 10-QSB, filed with
the
Commission on November 21, 2000.
|
|
3.1c
|
Certificate
of Amendment to Certificate of Incorporation, filed June 26,
2007.
Incorporated herein by reference to Exhibit 3.1c to the Company's
quarterly report on Form 10-QSB, filed with the Commission
on August 10,
2007.
|
|
3.1d
|
Form
of Restatement of Certificate of Incorporation of Delta Mutual,
Inc., as
amended. Incorporated herein by reference to Exhibit 3.1d to
the Company's
quarterly report on Form 10-QSB, filed with the Commission
on August 10,
2007.
|
|
4.1
|
Delta
Mutual, Inc. 2001 Employee Stock Option Plan, incorporated
herein by
reference to Appendix B to the Company's definitive Information
Statement
pursuant to Section 14C of the Exchange Act, filed with the
Commission on
November 9, 2001.
|
|
4.2
|
Delta
Mutual, Inc. 2001 Employee Stock Option Plan, as amended December
1,
2003.
|
|
4.2a
|
Delta
Mutual, Inc. 2004 Stock Option Plan. Incorporated herein by
reference to
Exhibit B to the Company's Definitive Proxy Statement, filed
with the
Commission on June 16, 2004.
|
|
4.3
|
Form
of 6% Convertible Promissory Notes of the Company due 2006.
Incorporated
by reference to Exhibit 4.3 to the Company's Current Report
on Form 8-K,
filed with the Commission on September 24, 2004.
|
|
4.4
|
Form
of Warrants to purchase shares of Common Stock, of the Company
issued to
the purchasers of the Company's 6% Convertible Promissory Notes.
Incorporated by reference to Exhibit 4.4 to the Company's Current
Report
on Form 8-K, filed with the Commission on September 24,
2004.
|
|
4.5
|
4%
Convertible Promissory Note of the Company due May 2006 issued
in the
principal amount of $129,160 on May 12, 2004. Incorporated
herein by
reference to Exhibit 4.5 to the Company's Quarterly Report
on Form 10-QSB,
filed with the Commission on November 15,
2004.
|
4.5a
|
Amendment,
dated as of May 2, 2006, to 4% Convertible Promissory Note
in the
principal amount of $129,160. Incorporated herein by reference
to Exhibit
4.5a to the Company’s Annual Report on Form 10-KSB, filed with the
Commission on April 2, 2007.
|
|
4.5b
|
Amendment,
dated as of July 6, 2006, to 4% Convertible Promissory Note
in the
principal amount of $129,160. Incorporated herein by reference
to Exhibit
4.5b to the Company’s Annual Report on Form 10-KSB, filed with the
Commission on April 2, 2007.
|
|
4.5c
|
Amendment,
dated as of October 10, 2006, to 4% Convertible Promissory
Note in the
principal amount of $100,000. Incorporated herein by reference
to Exhibit
4.5c to the Company’s Annual Report on Form 10-KSB, filed with the
Commission on April 2, 2007.
|
|
4.5d
|
Amendment,
dated as of November 27, 2006, to 4% Convertible Promissory
Note in the
principal amount of $100,000. Incorporated herein by reference
to Exhibit
4.5d to the Company’s Annual Report on Form 10-KSB, filed with the
Commission on April 2, 2007.
|
|
4.5e
|
Amendment,
dated as of February 21, 2007, to 4% Convertible Promissory
Note in the
principal amount of $100,000. Incorporated herein by reference
to Exhibit
4.5e to the Company’s Annual Report on Form 10-KSB, filed with the
Commission on April 2, 2007.
|
|
4.5f
|
Amendment,
dated as of February 14, 2008 to 4% Convertible Promissory
Note in the
principal amount of $100,000, filed herewith.
|
|
4.6
|
4%
Convertible Promissory Note of the Company due May 2006 issued
in the
principal amount of $193,740 on May 12, 2004. Incorporated
herein by
reference to Exhibit 4.6 to the Company's Quarterly Report
on Form 10-QSB,
filed with the Commission on November 15, 2004.
|
|
4.6a
|
Amendment,
dated as of May 2, 2006, to 4% Convertible Promissory Note
in the
principal amount of $193,740. Incorporated herein by reference
to Exhibit
4.6a to the Company’s Annual Report on Form 10-KSB, filed with the
Commission on April 2, 2007.
|
|
4.6b
|
Amendment,
dated as of July 6, 2006, to 4% Convertible Promissory Note
in the
principal amount of $193,740. Incorporated herein by reference
to Exhibit
4.6b to the Company’s Annual Report on Form 10-KSB, filed with the
Commission on April 2, 2007.
|
|
4.6c
|
Amendment,
dated as of September 8, 2006, to 4% Convertible Promissory
Note in the
principal amount of $193,740. Incorporated herein by reference
to Exhibit
4.6c to the Company’s Annual Report on Form 10-KSB, filed with the
Commission on April 2, 2007.
|
|
4.6d
|
Amendment,
dated as of November 21, 2006, to 4% Convertible Promissory
Note in the
principal amount of $193,740. Incorporated herein by reference
to Exhibit
4.6d to the Company’s Annual Report on Form 10-KSB, filed with the
Commission on April 2, 2007.
|
|
4.6e
|
Amendment,
dated April 4, 2007, to 4% Convertible Promissory Note in the
Principal
Amount of $193,740. Incorporated herein by reference to Exhibit
4.6e to
the Company's quarterly report on Form 10-QSB, filed with the
Commission
on August 10, 2007.
|
4.6f
|
Amendment,
dated September 7, 2007 to Convertible Promissory Note in the
principal
amount of $193,740. Incorporated herein by reference to Exhibit
4.6f to
the Company's quarterly report on Form 10-QSB, filed with the
Commission
on November 9, 2007.
|
|
4.7
|
4%
Convertible Promissory Note "A" of the Company due December
2006 issued in
the principal amount of $157,000 on July 1, 2004. Incorporated
herein by
reference to Exhibit 4.7 to the Company's Quarterly Report
on Form 10-QSB,
filed with the Commission on November 15,
2004.
|
4.8
|
4%
Convertible Promissory Note "B" of the Company due January
2007 issued in
the principal amount of $37,500 on July 16, 2004. Incorporated
herein by
reference to Exhibit 4.8 to the Company's Quarterly Report
on Form 10-QSB,
filed with the Commission on November 15, 2004.
|
|
4.9
|
6%
Promissory note of the Company due December 2005 issued in
the principal
amount of $71,731.29 on March 22, 2005. Incorporated herein
by reference
to Exhibit 4.9 to the Company's current report on Form 8K
filed with the
Commission on March 25, 2005.
|
|
4.10
|
8%
Promissory note of the Company due October 2, 2005 issued
in the principal
amount of $210,655.04 on April 5, 2004. Incorporated herein
by reference
to Exhibit 4.10 to the Company's current report on Form 8K
filed with the
Commission on April 11, 2005.
|
|
4.11
|
6%
Convertible Promissory Note due September 6, 2007, issued
in the aggregate
principal amount of $266,000 on April 5, 2007. Incorporated
herein by
reference to Exhibit 4.7 to the Company's current report
on Form 8K filed
with the Commission on April 11, 2007.
|
|
4.11a
|
Amended
and Restated 6% Convertible Promissory Note due April 5,
2008, issued in
the aggregate principal amount of $266,000 on April 30, 2007.
Incorporated
herein by reference to Exhibit 4.7a to the
Company's
current report on Form 8K filed with the Commission on May
2,
2007.
|
|
4.12
|
10%
Convertible Promissory Note due June 2008, issued in the
aggregate
principal amount of $550,000 on May 1, 2007. Incorporated
herein by
reference
to
Exhibit 4.12 to the Company's current report on Form 8K filed
with the
Commission May 5, 2007.
|
|
10.1
|
Agreement
of Sale with Enterprises Solutions, Inc. dated May 11, 2001,
and
amendments. Incorporated herein by reference to Exhibit 10.2
to the
Company's current report on Form 8-K, filed with the Commission
on May 23,
2001.
|
|
10.2
|
Promissory
note from Enterprises Solutions, Inc. dated October 31, 2001.
Incorporated
by reference to Exhibit 10.3 to the Company's annual report
on Form
10-KSB, filed with the Commission on April 16, 2002.
|
|
10.3
|
Promissory
Note to Rosanne Solomon dated November 27, 2001. Incorporated
herein by
reference to Exhibit 10.1 to Amendment No. 3 to the Company's
registration
statement on Form S-4,filed with the Commission on November
30,
2001.
|
10.4
|
License
Agreement with Enterprises Solutions, Inc. dated December
11, 2001.
Incorporated by reference to Exhibit 10.5 to the Company's
annual report
on Form 10-KSB, filed with the Commission on April 16,
2002.
|
|
10.5
|
Employment
Agreement between Kenneth A. Martin and the Company. Incorporated
by
reference to Exhibit 10.6 to the Company's annual report
on Form 10-KSB,
filed with the Commission on April 16, 2002.
|
|
10.6
|
Agreement,
dated January 13, 2003, between the Company and Kenneth A.
Martin.
Incorporated by reference to Exhibit 10.7 to the Company's
registration
statement on Form S-8, filed with the Commission on February
13,
2003.
|
10.7
|
Agreement,
dated February 3, 2003, between the Company and Peter F.
Russo.
Incorporated by reference to Exhibit 10.8 to the Company's
registration
statement on Form S-8, filed with the Commission on February
13, 2003.
|
|
10.8
|
Agreement,
dated February 4, 2003, between the Company and J. Dapray
Muir.
Incorporated by reference to Exhibit 10.9 to the Company's
registration
statement on Form S-8, filed with the Commission on February
13, 2003.
|
|
10.9
|
Executive
Employment Agreement, effective March 11, 2003, by and between
the Company
and Peter F. Russo. Incorporated herein by reference to Exhibit
10.8 to
the Company's Annual Report on Form 10-KSB, filed with the
Commission on
April 14, 2003.
|
|
10.10
|
Consulting
Agreement, effective February 28, 2003, between M.U.R.G.,
LLC and Delta
Mutual, Inc. Incorporated herein by reference to Exhibit
10.9 to the
Company's Annual Report on Form 10-KSB, filed with the Commission
on April
14, 2003.
|
|
10.11
|
Agreement,
March 31, 2003, between the Company and Burrows Consulting
Inc.
Incorporated herein by reference to Exhibit 10.3 to the Company's
current
report on Form 8-K, filed with the Commission on April 25,
2003.
|
|
10.12
|
License
Agreement with Joseph Friedman and Sons, International, Inc.,
dated April
2, 2003. Incorporated herein by reference to Exhibit 10.7
to the Company's
Annual Report on Form 10-KSB, filed with the Commission on
April 14, 2003.
|
|
10.13
|
Agreement,
dated July 1, 2003, between the Company and Gary T. Robinson.
Incorporated
herein by reference to Exhibit 10.10 to the Company's registration
statement on Form S-8, filed with the Commission on August
20, 2003.
|
|
10.14
|
Agreement,
dated August 29, 2003, between the Company and Burrows Consulting
Inc.
Incorporated herein reference to Exhibit 10.10 to the Company's
current
report on Form 8-K, filed with the Commission on September
4, 2003.
|
10.15
|
Strategic
Alliance Agreement, dated September 10, 2003, between Delta-Envirotech,
Inc. and ZAFF International Ltd. Incorporated herein by reference
to
Exhibit 99.2 to the Company's current report on Form 8-K,
filed with the
Commission on January 22, 2004.
|
|
10.16
|
Agreement,
dated January 14, 2004, by and between Delta Mutual, Inc.
and Hi Tech
Consulting and Construction, Inc. Incorporated herein by
reference to
Exhibit 10.16 to the Company's Annual Report on Form 10-KSB,
filed with
the Commission on April 6, 2004.
|
|
10.17
|
Agreement
to Purchase Stock, dated January 14, 2004, between Delta
Mutual, Inc. and
Hi Tech Consulting and Construction, Inc., as sellers, and
Ali Razmara, as
purchaser. Incorporated herein by reference to Exhibit 10.17
to the
Company's Annual Report on Form 10-KSB, filed with the Commission
on April
6, 2004.
|
|
10.18
|
Consulting
Agreement, dated as of March 21, 2004, between Delta Mutual,
Inc. and
Clark Street Capital. Incorporated herein by reference to
Exhibit 10.18 to
the Company's Quarterly Report on Form 10-QSB, filed May
19, 2004.
|
|
10.19
|
Consulting
Services Agreement, dated as of April 16, 2004, between Delta
Mutual, Inc.
and Basic Investors, Inc. Incorporated herein by reference
to Exhibit
10.19 to the Company's Quarterly Report on Form 10-QSB, filed
May 19,
2004.
|
|
10.20
|
Memorandum
of Understanding, dated as of March 17, 2004, by and between
Delta-Envirotech, Inc., PT Faryan Nusantara and Crescent
Aeronautical
Technology. Incorporated herein by reference to Exhibit 10.20
to the
Company's Quarterly Report on Form 10-QSB, filed May 19,
2004.
|
|
10.21
|
Agreement,
dated April 5, 2004, Trans Indies Realty Investment Corporation
and Delta
Developers Corp. Incorporated herein by reference to Exhibit
10.21 to the
Company's Quarterly Report on Form 10-QSB, filed August 12,
2004.
|
10.22
|
Term
Sheet, dated May 12, 2004, among Delta Mutual, Inc., Neil
Berman and Ivano
Angelastri. Incorporated herein by reference to Exhibit 10.22
to the
Company's Quarterly Report on Form 10-QSB, filed August 12,
2004.
|
|
10.23
|
Term
Sheet, dated July 1, 2004, between Delta Mutual, Inc. and
Neil Berman.
Incorporated herein by reference to Exhibit 10.23 to the
Company's
Quarterly Report on Form 10-QSB, filed August 12, 2004.
|
|
10.24
|
Settlement
Agreement and Mutual General Releases, dated November 26,
2004, between
the Company and Joseph Friedman and Sons International, Inc.
Incorporated
herein by reference to Exhibit 10.24 to the Company's Current
Report on
Form 8-K, filed with the Commission on December 2, 2004.
|
|
10.26
|
Executive
Employment Agreement, dated May 23, 2005, between Delta
Mutual,
Inc. and Martin G. Chilek. Incorporated herein by reference
to Exhibit
10.26 to the Company's Current Report on Form 8-K, filed
with the
Commission on May 25, 2005.
|
|
10.27
|
Investment
Banking Agreement, dated June 17, 2005, between Delta Mutual,
Inc. and
T&T Vermoegensverwaltungs AG. Incorporated herein by reference
to
Exhibit 10.27 to the Company's Current Report on Form 8-K,
filed with the
Commission on June 30, 2005.
|
|
10.27a
|
Addendum,
dated August 3, 2005, to Investment Banking Agreement, dated
June 17,
2005, by and between Delta Mutual, Inc. and T&T Vermoegensverwaltungs
AG. Incorporated herein by reference to Exhibit 10.27a to
the Company's
Amended Current Report on Form 8-K, filed with the Commission
on August
18, 2005.
|
|
10.28
|
Purchase
Agreement, dated August 26, 2005, by and between Delta Technologies,
Inc.,
as Buyer, and Richard F. Straub, Jr. and John M. Latza, as
Sellers.
Incorporated herein by reference to Exhibit 10.28 to the
Company's Current
Report on Form 8-K, filed with the Commission on August 31,
2005.
|
|
10.29
|
Consulting
Services Agreement, dated August 26, 2005, by and between
Delta Mutual,
Inc. and Juan Bautista Rodriguez Pagan. Incorporated herein
by reference
to Exhibit 10.29 to the Company's Current Report on Form
8-K, filed with
the Commission on August 31, 2005.
|
|
10.30
|
Consulting
Services Agreement, dated August 26, 2005, by and between
Delta
Technologies, Inc. and Richard F. Straub, Jr. Incorporated
herein by
reference to Exhibit 10.30 to the Company's Current Report
on Form 8-K,
filed with the Commission on August 31, 2005.
|
|
10.31
|
Service
Order, dated February 6, 2006, between Pertamina and PT.
Triyudha.
Incorporated herein by reference to Exhibit 10.31
to
the Company's Current Report on Form 8-K, filed with the
Commission on
February 27, 2006.
|
|
10.32
|
Executive
Employment Agreement, dated February 28, 2006, between Delta
Mutual, Inc.
and Peter F. Russo. Incorporated herein by reference to Exhibit
10.32 to
the Company's Current Report on Form 8-K, filed with the
Commission on
March 1, 2006.
|
|
10.33
|
Form
of 8% Term Notes issued April 5, 2005 by Delta Mutual, Inc.,
in the
aggregate principal amount of $210,655. Incorporated herein
by reference
to Exhibit 10.33 to the Company’s Annual Report on Form 10-KSB, filed with
the Commission on April 3, 2006.
|
10.33a
|
Form
of Amendment, dated September 30, 2005, to Delta Mutual,
Inc. 8% Term
Notes issued April 5, 2005. Incorporated herein by reference
to Exhibit
10.33a to the Company’s Annual Report on Form 10-KSB, filed with the
Commission on April 3, 2006.
|
10.33b
|
Form
of Second Amendment, dated December 19, 2005, to Delta Mutual,
Inc. 8%
Term Notes issued April 5, 2005. Incorporated herein by reference
to
Exhibit 10.33b to the Company’s Annual Report on Form 10-KSB, filed with
the Commission on April 3, 2006.
|
|
10.33c
|
Form
of Third Amendment, dated March 20, 2006, to Delta Mutual,
Inc. 8% Term
Notes issued April 5, 2005. Incorporated herein by reference
to Exhibit
10.33c to the Company’s Annual Report on Form 10-KSB, filed with the
Commission on April 3, 2006.
|
|
10.33d
|
Form
of Fourth Amendment, dated as of June 2, 2006, to 8% Term
Notes issued
April 5, 2005. Incorporated herein by reference to Exhibit
10.33d to the
Company’s Annual Report on Form 10-KSB, filed with the Commission
on April
2, 2007.
|
|
10.33e
|
Form of Amended and Restated 8% Term Notes issued March 6, 2008 by Delta Mutual, Inc. in the aggregate principal amount of $150,655, filed herewith. | |
10.34
|
Placement
Agent Agreement, dated June 6, 2006, between Delta Mutual,
Inc. And SDM
Consultant Corporation. Incorporated herein by reference
to Exhibit 10.34
to the Company’s Annual Report on Form 10-KSB, filed with the Commission
on April 2, 2007.
|
|
10.35
|
Membership
Interest Purchase Agreement, dated March 4, 2008, between
Delta
Mutual, Inc. and Egani, Inc. Incorporated herein by reference
to Exhibit
10.35 to the Company’s Current Report on Form 8-K, filed with the
Commission on March 11, 2008.
|
|
10.36
|
Consulting
Services Agreement, dated September 10, 2007, between Delta
Mutual,
Inc. and Security Systems International, Inc. Incorporated
herein by
reference to Exhibit 10.36 to the Company’s Current Report on Form 8-K,
filed with the Commission on March 11, 2008.
|
|
10.37
|
Form
of 6% Promissory Notes issued March 6, 2008 by Delta Mutual,
Inc. in the
aggregate principal amount of $121,000, filed herewith.
|
|
14.
|
Delta
Mutual, Inc. Code of Conduct and Business Ethics. Incorporated
herein by
reference to Exhibit 10.25 to the Company’s Annual Report on Form 10-KSB,
filed with the Commission on April 14, 2005.
|
|
31.1
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley
Act of 2002, filed herewith.
|
|
31.2
|
Certification
of Chief Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley
Act of 2002, filed herewith.
|
|
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,
filed herewith.
|
|
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,
filed herewith.
|
ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
|
(1)
Aggregate fees for the last two
years:
|
2007
|
2006
|
||||
$
|
41,071
|
$
|
84,453
|
(2)
Audit related fees:
|
2007
|
2006
|
||||
$
|
41,071
|
$
|
76,953
|
(3)
Tax fees:
|
2007
|
2006
|
||||
$
|
-0-
|
$
|
7,500
|
(4)
All other fees: NA
|
(5)
Audit committee pre-approval processes, percentages
of services approved
by audit committee, percentage of hours spent on
audit engagement by
persons other than principal accountant's full time
employees: NA
|
By:
|
/s/
Peter F. Russo
|
By:
|
/s/
Martin G. Chilek
|
/s/
Peter F. Russo
|
PAGE
|
||
Report
of Independent Registered Public Accounting Firm
|
F-1
|
|
Financial
Statements:
|
||
Consolidated
Balance Sheet as of December 31, 2007 and 2006
|
F-2
|
|
Consolidated
Statements of Operations for the years ended
|
||
December
31, 2007 and 2006
|
F-3
|
|
Consolidated
Statements of Stockholders' Deficiency as of
|
||
December
31, 2007 and 2006
|
F-4
|
|
Consolidated
Statements of Cash Flows for the years ended
|
||
December
31, 2007 and 2006
|
F-6
|
|
Notes
to Consolidated Financial Statements
|
F-8
|
December
31,
|
|||||||
2007
|
2006
|
||||||
ASSETS
|
|||||||
Current
Assets:
|
|||||||
Cash
|
$
|
57,633
|
$
|
211,147
|
|||
Prepaid
expenses
|
1,914
|
249,954
|
|||||
Total
Current Assets
|
59,547
|
461,101
|
|||||
Property
and equipment - net
|
368,123
|
448,581
|
|||||
Intangible
asset
|
126,317
|
133,467
|
|||||
Other
assets
|
650
|
1,400
|
|||||
TOTAL
ASSETS
|
$
|
554,637
|
$
|
1,044,549
|
|||
LIABILITIES
AND STOCKHOLDERS' DEFICIENCY
|
|||||||
Current
Liabilities:
|
|||||||
Accounts
payable
|
$
|
173,370
|
$
|
168,403
|
|||
Accrued
expenses
|
1,225,674
|
890,351
|
|||||
Convertible
debt
|
397,340
|
369,740
|
|||||
Notes
payable
|
240,655
|
240,655
|
|||||
TOTAL
LIABILITIES
|
2,037,039
|
1,669,149
|
|||||
Minority
interest in consolidated subsidiaries
|
225,797
|
241,550
|
|||||
Stockholders'
Deficiency:
|
|||||||
Common
stock $0.0001 par value - authorized 250,000,000 shares; 78,882,953
and
62,161,246 outstanding, respectively
|
7,888
|
6,216
|
|||||
Additional
paid-in-capital
|
9,366,766
|
7,734,138
|
|||||
Accumulated
deficit
|
(11,082,853
|
)
|
(8,862,504
|
)
|
|||
Deferred
Stock Purchase
|
-
|
266,000
|
|||||
Subscription
Receivable
|
-
|
(10,000
|
)
|
||||
Total
Stockholders' Deficiency
|
(1,708,199
|
)
|
(866,150
|
)
|
|||
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
|
$
|
554,637
|
$
|
1,044,549
|
Years
Ended December 31,
|
|||||||
2007
|
2006
|
||||||
Revenue
|
-
|
$
|
279,870
|
||||
Costs
and Expenses:
|
|||||||
Cost
of Sales
|
-
|
238,897
|
|||||
General
and administrative expenses
|
2,213,030
|
2,349,438
|
|||||
Impairment
of long term assets
|
25,000
|
35,200
|
|||||
2,238,030
|
2,623,535
|
||||||
Loss
from operations
|
(2,238,030
|
)
|
(2,343,665
|
)
|
|||
Accretion
of convertible debt
|
-
|
(175,385
|
)
|
||||
Interest
expense
|
(31,041
|
)
|
(42,876
|
)
|
|||
Loss
before minority interest
|
2,269,071
|
(2,561,926
|
)
|
||||
Minority
interest share of loss of consolidated subsidiaries
|
48,722
|
19,661
|
|||||
Loss
before benefit from income taxes
|
(2,220,349
|
)
|
(2,542,265
|
)
|
|||
Provision
for income taxes
|
-
|
-
|
|||||
Net
loss
|
$
|
(2,220,349
|
)
|
$
|
(2,542,265
|
)
|
|
Loss
per common share- basic and diluted
|
$
|
(0.03
|
)
|
$
|
(0.05
|
)
|
|
Weighted
average number of common shares outstanding- basic and
diluted
|
66,169,646
|
48,419,689
|
Number
of
|
Deferred
|
|||||||||||||||||||||
Common
|
Common
|
Paid
in
|
Accumulated
|
Subscription
|
Stock
|
|||||||||||||||||
Shares
|
Stock
|
Capital
|
Deficit
|
Receivable
|
Purchase
|
Total
|
||||||||||||||||
Balance,
January 1, 2007
|
62,161,246
|
6,216
|
7,734,138
|
(8,862,504
|
)
|
(10,000
|
)
|
266,000
|
(866,150
|
)
|
||||||||||||
Issuance
of common stock for interest expense (valued at $0.06 - $0.125
per
share)
|
135,040
|
13
|
15,307
|
-
|
-
|
-
|
15,320
|
|||||||||||||||
Issuance
of common stock for convertible debt (valued at $0.05 - $.125 per
share)
|
16,586,667
|
1,659
|
830,341
|
-
|
-
|
-
|
832,000
|
|||||||||||||||
Conversion
to convertible notes
|
-
|
-
|
-
|
-
|
-
|
(266,000
|
)
|
(266,000
|
)
|
|||||||||||||
Receipt
of subscribed stock
|
-
|
-
|
-
|
-
|
10,000
|
-
|
10,000
|
|||||||||||||||
Stock
based compensation expense
|
-
|
-
|
786,980
|
-
|
-
|
-
|
786,980
|
|||||||||||||||
Net
(loss)
|
-
|
-
|
-
|
(2,220,349
|
)
|
-
|
-
|
(2,220,349
|
)
|
|||||||||||||
Balance,
December 31, 2007
|
78,882,953
|
$
|
7,888
|
$
|
9,366,766
|
$
|
(11,082,853
|
)
|
$
|
-
|
$
|
-
|
$
|
(1,708,199
|
)
|
Number
of
|
Deferred
|
Deferred
|
|||||||||||||||||||||||
Common
|
Common
|
Paid
in
|
Accumulated
|
Subscription
|
Stock
|
Compensation
|
|||||||||||||||||||
Shares
|
Stock
|
Capital
|
Deficit
|
Receivable
|
Purchase
|
Expense
|
Total
|
||||||||||||||||||
Balance,
January 1, 2006
|
35,321,598
|
$
|
3,532
|
$
|
5,441,047
|
$
|
(6,320,239
|
)
|
$
|
(10,000
|
)
|
$
|
-
|
$
|
(300,000
|
)
|
$
|
(1,185,660
|
)
|
||||||
Issuance
of common stock for interest expense (valued at $0.05 per
share)
|
517,426
|
52
|
25,819
|
-
|
-
|
-
|
-
|
25,871
|
|||||||||||||||||
Issuance
of common stock for convertible debt (valued at $0.05 - $.125 per
share)
|
5,753,280
|
575
|
386,628
|
-
|
-
|
-
|
-
|
387,203
|
|||||||||||||||||
Sales
of common stock (valued at $0.05 - $.12 per share)
|
17,182,212
|
1,718
|
832,782
|
-
|
-
|
-
|
-
|
834,500
|
|||||||||||||||||
Issuance
of common stock for services (valued at $0.09 - $.38 per
share)
|
2,431,730
|
243
|
462,398
|
-
|
-
|
-
|
-
|
462,641
|
|||||||||||||||||
Issuance
of common stock upon exercise of warrants (valued at $0.10 per
share)
|
730,000
|
73
|
72,927
|
-
|
-
|
-
|
-
|
73,000
|
|||||||||||||||||
Issuance
of common stock for settlement (valued at $0.19 per share)
|
225,000
|
23
|
42,727
|
-
|
-
|
-
|
-
|
42,750
|
|||||||||||||||||
Adoption
of SFAS No. 123 [R]
|
-
|
-
|
(300,000
|
)
|
-
|
-
|
-
|
300,000
|
-
|
||||||||||||||||
Deposit
on common stock not yet issued
|
-
|
-
|
-
|
-
|
-
|
266,000
|
-
|
266,000
|
|||||||||||||||||
Stock
based compensation expense
|
-
|
-
|
769,810
|
-
|
-
|
-
|
-
|
769,810
|
|||||||||||||||||
Net
(loss)
|
-
|
-
|
-
|
(2,542,265
|
)
|
-
|
-
|
-
|
(2,542,265
|
)
|
|||||||||||||||
Balance,
December 31, 2006
|
62,161,246
|
6,216
|
7,734,138
|
(8,862,504
|
)
|
(10,000
|
)
|
266,000
|
-
|
(866,150
|
)
|
Years
Ended December 31,
|
|||||||
2007
|
2006
|
||||||
Cash
flows from operating activities:
|
|||||||
Net
loss
|
$
|
(2,220,349
|
)
|
$
|
(2,542,265
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|||||||
Depreciation
and amortization
|
52,108
|
48,825
|
|||||
Non-cash
compensation
|
15,320
|
427,512
|
|||||
Accretion
of convertible debt
|
-
|
175,385
|
|||||
Compensatory
element of option issuance
|
786,980
|
769,810
|
|||||
Impairment
of long term asset
|
25,000
|
35,200
|
|||||
Minority
interest in losses of consolidated subsidiaries
|
(48,722
|
)
|
(19,661
|
)
|
|||
Changes
in operating assets and liabilities
|
615,680
|
139,153
|
|||||
Net
cash used in operating activities
|
(773,983
|
)
|
(966,041
|
)
|
|||
Cash
flows from investing activities:
|
|||||||
Deposit
on land
|
(25,000
|
)
|
-
|
||||
Purchase
of fixed assets
|
-
|
(89,258
|
)
|
||||
Refund
of land deposit
|
35,500
|
-
|
|||||
Net
cash provided by investing activities
|
10,500
|
(89,258
|
)
|
||||
Cash
flows from financing activities:
|
|||||||
Proceeds
from sale of common stock and deferred stock purchase
|
10,000
|
1,100,500
|
|||||
Proceeds
from exercise of warrants
|
-
|
73,000
|
|||||
Proceeds
from loans
|
-
|
30,000
|
|||||
Proceeds
from convertible debt financing
|
567,000
|
16,000
|
|||||
Repayment
of loan
|
-
|
(23,910
|
)
|
||||
Payments
to minority interests
|
(60,376
|
)
|
(311,261
|
)
|
|||
Proceeds
from minority interest
|
93,345
|
315,074
|
|||||
Net
cash provided by financing activities
|
609,969
|
1,199,403
|
|||||
Net
increase (decrease) in cash
|
(153,514
|
)
|
144,104
|
||||
Cash
- Beginning of year
|
211,147
|
67,042
|
|||||
Cash
- End of year
|
$
|
57,633
|
$
|
211,146
|
Years
Ended December 31,
|
|||||||
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
|
-
|
20,000
|
|||||
Decrease
in prepaid expenses
|
248,040
|
15,895
|
|||||
Decrease
in other assets
|
750
|
-
|
|||||
Increase
in accounts payable and accrued expenses
|
366,890
|
103,258
|
|||||
$
|
615,680
|
$
|
139,153
|
||||
Non-cash
financing activities:
|
|||||||
Issuance
of common stock for convertible debt
|
$
|
832,000
|
$
|
387,202
|
|||
Issuance
of convertible notes for deferred stock purchase
|
$
|
266,000
|
$
|
-
|
|||
Issuance
of common stock in lieu of payment of accrued expenses
|
$
|
15,320
|
$
|
-
|
|||
Issuance
of common stock for services
|
$
|
-
|
$
|
462,641
|
|||
Issuance
of common stock for settlement
|
$
|
-
|
$
|
42,750
|
December
31,
|
|||||||
2007
|
2006
|
||||||
Equipment
|
$
|
455,035
|
$
|
455,035
|
|||
Deposits
on land
|
0
|
35,500
|
|||||
Leasehold
improvements
|
7,807
|
7,807
|
|||||
462,842
|
498,342
|
||||||
Less
accumulated depreciation
|
94,719
|
49,761
|
|||||
$
|
368,123
|
$
|
448,581
|
December
31,
|
|||||||
2007
|
2006
|
||||||
Gross
Carrying Amount
|
$
|
143,000
|
$
|
143,000
|
|||
Accumulated
Amortization
|
16,683
|
9,533
|
|||||
Intellectual
property costs
|
$
|
126,317
|
$
|
133,467
|
Estimated
|
|
|||
Year
Ending
|
Amortization
|
|||
December
31,
|
Expense
|
|||
2008
|
7,150
|
|||
2009
|
7,150
|
|||
2010
|
7,150
|
|||
2011
|
7,150
|
|||
2012
|
7,150
|
a. |
In
December 2003, the Company formed a joint venture to develop Section
124,
low income housing in the Commonwealth of Puerto Rico. The Company
became
the general partner and 75% majority owner of a limited partnership,
Delta
Development Partners, LP that owns 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
homes under Section 124. During the year ended December 31, 2006,
the
activities associated with this joint venture were
discontinued.
|
b. |
On
January 14, 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.
|
c. |
Minority
interests primarily consist of outside investors ownership interest
in
Delta Development Partners, L.P.; Delta Development Partners II,
L.P.;
Delta TA, LP; Delta Developers Corp.; Delta Developers Guayanilla
Corp.;
Delta-Envirotech, Inc. and PT Triyudha–
Envirotech.
|
2007
|
2006
|
||||||
Delta
Development Partners L.P.
|
$
|
82,087
|
$
|
145,092
|
|||
Delta
Development Partners II, L.P.
|
36,808
|
39,741
|
|||||
Delta
TA L.P.
|
106,902
|
110,891
|
|||||
Delta
Developers Corp.
|
—
|
—
|
|||||
Delta
Developers Guayanilla Corp.
|
—
|
—
|
|||||
Delta-Envirotech,
Inc.
|
—
|
—
|
|||||
PT
Triyudha – Envirotech
|
—
|
(54,174
|
)
|
||||
$
|
225,797
|
$
|
241,550
|
2008
|
$
|
397,340
|
||
$
|
397,340
|
December
31,
|
|||||||
2007
|
2006
|
||||||
Professional
fees
|
$
|
34,703
|
$
|
61,500
|
|||
Interest
expense
|
80,439
|
63,278
|
|||||
Payroll
expense
|
462,195
|
353,320
|
|||||
Payroll
expense-officers
|
117,436
|
117,436
|
|||||
Payroll
tax expense
|
34,742
|
36,445
|
|||||
Accrued
consulting fees
|
144,000
|
30,000
|
|||||
Other
accrued expenses
|
352,159
|
228,352
|
|||||
$
|
1,225,674
|
$
|
890,351
|
a. |
The
Company's subsidiary, Delta-Envirotech, Inc. ("Envirotech") pays
monthly
office rent to David Razmara, the president of Envirotech and a
shareholder of the Company, in the current amount of $2,000. The
rent
expense for the years ended December 31, 2007 and 2006 amounted to
$24,000
and $12,000, respectively.
|
b. |
As
of December 31, 2006, Delta Developers Corp., a majority-owned subsidiary
of the Company, eliminated $203,000 of management fees payable to
a
related party, because the Company's initial low income housing project
in
Puerto Rico was disapproved and all activities associated with that
project were discontinued. The elimination of the management fee
expense
is included in the Company's consolidated statements of operations
for the
year ended December 31, 2006.
|
Years
|
|||||||
Ended December 31
|
|||||||
2007
|
2006
|
||||||
Total
Revenue:
|
|||||||
North
America
|
$
|
—
|
$
|
—
|
|||
Indonesia
|
—
|
279,870
|
|||||
Middle
East
|
—
|
—
|
|||||
Puerto
Rico
|
—
|
—
|
|||||
$
|
—
|
$
|
279,870
|
||||
Loss
from Operations:
|
|||||||
North
America
|
$
|
(2,165,830
|
)
|
$
|
(2,330,053
|
)
|
|
Indonesia
|
(36,950
|
)
|
—
|
||||
Middle
East
|
(20,000
|
)
|
(1,100
|
)
|
|||
Puerto
Rico
|
(15,250
|
)
|
(12,512
|
)
|
|||
$
|
(2,238,030
|
)
|
$
|
(2,343,665
|
)
|
||
Long-lived
Assets:
|
|||||||
North
America
|
$
|
208,988
|
$
|
225,896
|
|||
Indonesia
|
286,102
|
322,052
|
|||||
Middle
East
|
—
|
—
|
|||||
Puerto
Rico
|
—
|
35,500
|
|||||
$
|
495,090
|
$
|
583,448
|
||||
Capital
Expenditures:
|
|||||||
North
America
|
$
|
—
|
$
|
89,258
|
|||
Indonesia
|
—
|
—
|
|||||
Middle
East
|
—
|
—
|
|||||
Puerto
Rico
|
—
|
—
|
|||||
$
|
—
|
$
|
89,258
|
||||
Depreciation
and Amortization:
|
|||||||
North
America
|
$
|
16,158
|
$
|
12,875
|
|||
Indonesia
|
35,950
|
35,950
|
|||||
Middle
East
|
—
|
—
|
|||||
Puerto
Rico
|
—
|
—
|
|||||
$
|
52,108
|
$
|
48,826
|
For the Year Ended
|
|||||||
December 31, 2007
|
|||||||
Temporary
|
Tax
|
||||||
Difference
|
Effect
|
||||||
Gross
deferred tax asset resulting from net operating loss
carryforward
|
$
|
11,050,000
|
$
|
3,757,000
|
|||
Valuation
allowance
|
(11,050,000
|
)
|
(3,757,000
|
)
|
|||
Net
deferred income tax asset
|
$
|
—
|
$
|
—
|
For the Year Ended
|
|||||||
December 31, 2006
|
|||||||
Temporary
|
Tax
|
||||||
Difference
|
Effect
|
||||||
Gross
deferred tax asset resulting from net operating loss
carryforward
|
$
|
8,850,000
|
$
|
3,009,000
|
|||
Valuation
allowance
|
(8,850,000
|
)
|
(3,009,000
|
)
|
|||
Net
deferred income tax asset
|
$
|
—
|
$
|
—
|
For the Year Ended
|
|||||||
December 31,
|
|||||||
2007
|
2006
|
||||||
Federal
income tax rate
|
(34
|
)%
|
(34
|
)%
|
|||
Effect
of unused operating losses
|
34
|
%
|
34
|
%
|
|||
Effective
income tax rate
|
0
|
%
|
0
|
%
|
2007
|
2006
|
||||||||||||
Shares
|
Weighted-Average
Exercise Share Price
|
Shares
|
Weighted-Average
Exercise Share
Price
|
||||||||||
Options
outstanding beginning of year
|
7,978,000
|
$
|
0.11
|
8,000,000
|
$
|
0.25
|
|||||||
Options
granted
|
-
|
$
|
-
|
8,756,000
|
$
|
0.12
|
|||||||
Options
exercised
|
-
|
$
|
-
|
-
|
$
|
-
|
|||||||
Options
cancelled/expired
|
-
|
$
|
-
|
(8,778,000
|
)
|
$
|
0.24
|
||||||
Options
outstanding - end of year
|
7,978,000
|
$
|
0.11
|
7,978,000
|
$
|
0.11
|
|||||||
Option
Price Range at End of Year
|
$
|
0.11
|
$
|
0.11
|
|||||||||
Option
price range for exercised shares
|
-
|
-
|
|||||||||||
Options
available for grant at end of year
|
2,022,000
|
2,022,000
|
|||||||||||
Weighted
- average fair value of options granted during the year
|
$
|
—
|
$
|
0.12
|
|
Number
|
Weighted-Average
|
|
Number
|
Weighted-
|
||||||||||||
Range of
|
Outstanding
|
Remaining
|
Weighted-
|
Exercisable
|
Average
|
||||||||||||
Exercise
|
December 31,
|
Contractual
|
Average
|
December 31,
|
Exercise
|
||||||||||||
Price
|
2007
|
Life
|
Exercise Price
|
2007
|
Price
|
||||||||||||
$
0.11
|
|
7,978,000
|
3.5
|
$
|
0.11
|
7,978,000
|
$
|
0.11
|
Weighted-Average
|
|||||||
Grant-Date
|
|||||||
Non-vested Options
|
Options
|
Fair Value
|
|||||
Non-vested
at December 31, 2006:
|
4,069,060
|
$
|
0.11
|
||||
Granted
|
—
|
—
|
|||||
Vested
|
(4,069,060
|
)
|
0.11
|
||||
Forfeited,
expired or cancelled:
|
—
|
—
|
|||||
Non-vested
at December 31, 2007
|
—
|
0.11
|
2007
|
2006
|
|||||||||||||
Weighted-Average
|
Weighted-Average
|
|||||||||||||
Shares
|
Exercise Share Price
|
Shares
|
Exercise Share Price
|
|||||||||||
Warrants
outstanding, beginning of year
|
—
|
7,580,000
|
$
|
0.10
|
||||||||||
Warrants
granted
|
—
|
—
|
|
|||||||||||
Warrants
exercised
|
—
|
(730,000
|
)
|
$
|
0.10
|
|||||||||
Warrants
cancelled/expired
|
|
|
|
(6,850,000
|
)
|
$
|
0.10
|
|||||||
Warrants
outstanding, end of year
|
—
|
—
|
$
|
—
|
Year ending
|
||||
December 31,
|
||||
2008
|
7,800
|
|||
2009
|
1,300
|
|||
$
|
9,100
|
a. |
On
March 4, 2008, the Company acquired from Egani, Inc., an Arizona
corporation (“Egani”), 100% of the issued and outstanding membership
interests held by it in Altony SA, an Uruguay Sociedad Anonima (“Altony”),
which owns 100% of the issued and outstanding membership interests
in
South American Hedge Fund LLC, a Delaware limited liability company
(“SAHF”) in exchange for the issuance of 130,000,000 shares of common
stock. The purchase price for the membership interest was $ 2.6 million,
valued at $0.02 per share, the fair value on the date of issuance.
SAHF is
a hedge fund seeking to make investments in South America.
|
b. |
On
March 4, 2008, the Company issued 10,000,000 shares of common stock
to
Security Systems International, Inc. pursuant to a consulting service
agreement dated September 10, 2007. The shares were valued at $0.02,
fair
value at the date of
issuance.
|
c. |
During
March 2008,
the
Company borrowed $121,000 from two stockholders of the Company pursuant
to
promissory notes, bearing interest of 6% per annum with maturity
dates of
September 6, 2008.
|
d. |
In
2008, the Company issued 924,320 shares of common stock as payment
of
$43,600 principal amount and accrued interest due as of April 9,
2008,
pursuant to two convertible notes issued by the Company in April
2007.
|
DELTA
MUTUAL, INC.
|
T&T VERMOEGENSVERWALTUNGS AG | ||||||||||
(BORROWER)
|
(HOLDER)
|
||||||||||
By:
|
/s/
Peter F. Russo
|
By: |
/s/
Ivano Angelastri
|
||||||||
|
Peter F. Russo |
Ivano
Angelastri
|
|||||||||
President & CEO |
Managing
Director
|
$_______
|
March
6, 2008
|
Sellersville,
Pennsylvania
|
1.2
|
"Event
of Default" has the meaning given in Section 6
hereof.
|
1.3
|
"Lender"
shall mean the Person specified in the introductory paragraph of
this
Note.
|
1.4
|
"Payment
Dates" shall mean: $_____ on May 6, 2008
;
and six equal monthly payments of $_____; each due on the 6
th
day of the months of June through and including November
2008.
|
1.5
|
“Obligations"
shall mean all obligations, owed by the Company to the Lender, now
existing or hereafter arising under or pursuant to the terms of this
Note.
|
1.6
|
“Person"
shall mean and include an individual, a partnership, a corporation
(including a business trust), a joint stock company, a limited company,
an
unincorporated association, a joint venture, any other entity or
a
governmental authority.
|
2.
|
Interest.
All accrued and unpaid interest on this Note shall be waived by the
Lender
provided
the Company has made the payments of the principal amount as set
forth in
Section 1.4 above; otherwise all accrued and unpaid interest (calculated
form the date hereof) shall be due and payable on November 5, 2008
(the
“Maturity Date”) or as otherwise provide in this
Note.
|
3.
|
Seniority
.
This Note shall be senior to all general obligations of the Company
including, trade payables and other obligations incurred in the ordinary
course of business.
|
4.
|
Prepayment
at the Lender’s Option
.
At any time prior to the Maturity Date, the Company may repay the
principal amount of this Note, in whole or in part, including any
accrued
interest on this Note, without the prior written consent of the
Lender.
|
$_____
|
March
6, 2008
|
Sellersville,
Pennsylvania
|
4.2
|
Own
Account.
The Lender is purchasing this Note for his own account for investment,
not
as a nominee or agent, and not with a view to, or for resale in connection
with, the distribution thereof. The Lender has such knowledge and
experience in financial and business matters that the Lender is capable
of
evaluating the merits and risks of such investment, is able to incur
a
complete loss of such investment and is able to bear the economic
risk of
such investment for an indefinite period of
time.
|
DELTA
MUTUAL, INC.
|
||
a
Delaware corporation
|
||
By:
|
||
Name: Peter
F. Russo
|
||
Title: President
& CEO
|
a. |
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 small business
issuer's
most recent fiscal quarter (the small business issuer'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
|
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:
April 11, 2008
|
/s/
Peter F. Russo
|
|
Peter
F. Russo, President and Chief Executive
Officer
|
a. |
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;
|
e. |
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
|
f. |
disclosed
in this report any change in the small business issuer's internal
control
over financial reporting that occurred during the small business
issuer's
most recent fiscal quarter (the small business issuer'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
|
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:
April 11, 2008
|
/s/
Martin G. Chilek
|
|
Martin
G. Chilek, Chief Financial Officer
|
/s/
Peter F. Russo
|
Peter
F. Russo
|
President
and Chief Executive Officer
|
Chief
Financial Officer
|