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
of Principal Executive Offices)
|
(Zip
Code)
|
Large
accelerated filer
|
o
|
Accelerated
filer
o
|
Non-accelerated
filer
|
o
|
Smaller
reporting company
x
|
Page
|
|
Part
I. Financial Information
|
1
|
Item
1. Financial Statements
|
1
|
Consolidated
Balance Sheet as of September 30, 2008 and as of December 31, 2007
(unaudited)
|
2
|
Consolidated
Statements of Operations for the Nine and Three Months Ended
September 30, 2008 and 2007 (unaudited)
|
3
|
Consolidated
Statements of Stockholders’ Equity (unaudited)
|
4-5
|
Consolidated
Statements of Cash Flows for the Nine Months Ended September 30,
2008 and
2007 (unaudited)
|
6-7
|
Notes
to Unaudited Consolidated Financial Statements
|
8
|
Item
2. Management's Discussion and Analysis of Financial Condition and
Results
of Operations
|
24
|
|
|
Item
3. Quantitative and Qualitative Disclosures About Market
Risk
|
27
|
|
|
Item
4T.Controls and Procedures.
|
28
|
Part
II. Other Information
|
28
|
Item
1A. Risk Factors.
|
28
|
Item
5. Other Information.
|
29
|
Item
6. Exhibits.
|
29
|
Signatures
|
30
|
September 30,
|
December 31,
|
||||||
2008
|
2007
|
||||||
ASSETS
|
|||||||
Current
Assets:
|
|||||||
Cash
|
$
|
706,082
|
$
|
-
|
|||
Investments
|
1,720,235
|
5,879,020
|
|||||
Total
Current Assets
|
2,426,317
|
5,879,020
|
|||||
Property
and equipment - net
|
208,194
|
-
|
|||||
Investments
|
-
|
1,130,000
|
|||||
Other
assets
|
650
|
-
|
|||||
TOTAL
ASSETS
|
$
|
2,635,161
|
$
|
7,009,020
|
|||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Current
Liabilities:
|
|||||||
Accounts
payable
|
$
|
147,978
|
$
|
239,552
|
|||
Accrued
expenses
|
1,287,461
|
-
|
|||||
Convertible
debt
|
253,740
|
-
|
|||||
Notes
payable
|
400,518
|
-
|
|||||
Total
current liabilities
|
2,089,697
|
239,552
|
|||||
Long
Term Liabilities
|
|||||||
Concessions
|
-
|
2,300,000
|
|||||
TOTAL
LIABILITIES
|
2,089,697
|
2,539,552
|
|||||
Minority
interest in consolidated subsidiaries
|
226,528
|
-
|
|||||
Stockholders'
Equity:
|
|||||||
Common
stock $0.0001 par value - authorized 250,000,000 shares; 221,849,158
and
130,000,000 shares issued and outstanding at September 30, 2008
and
December 31, 2007 respectively
|
22,185
|
13,000
|
|||||
Additional
paid-in-capital
|
12,932,853
|
2,587,000
|
|||||
Retained
earnings (deficit)
|
(12,636,102
|
)
|
1,869,468
|
||||
Total
Stockholders' Equity
|
318,936
|
4,469,468
|
|||||
TOTAL
LIABILITIES AND
|
|||||||
STOCKHOLDERS'
EQUITY
|
$
|
2,635,161
|
$
|
7,009,020
|
Nine Months Ended September 30,
|
|
Three Months Ended September 30,
|
|
||||||||||
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|||||
Investment
results
|
$
|
(2,051,672
|
)
|
$
|
(313,859
|
)
|
$
|
1,339
|
$
|
653,186
|
|||
Operating
income
|
22,008
|
-
|
22,008
|
-
|
|||||||||
Revenue
|
(2,029,664
|
)
|
(313,859
|
)
|
23,347
|
653,186
|
|||||||
General
and administrative expenses
|
1,153,228
|
-
|
155,096
|
(399
|
)
|
||||||||
Impairment
of fixed asset
|
138,127
|
- |
138,127
|
- | |||||||||
Loss
on intellectual property
|
122,742
|
-
|
-
|
-
|
|||||||||
Valuation
results
|
22
|
(4,263
|
)
|
-
|
(640
|
)
|
|||||||
1,414,119
|
(4,263
|
)
|
293,223
|
(1,039
|
)
|
||||||||
Loss
from operations
|
(3,443,783
|
)
|
(309,596
|
)
|
(291,884
|
)
|
654,225
|
||||||
Interest
expense
|
15,935
|
-
|
(8,325
|
)
|
-
|
||||||||
Loss
before minority interest
|
(3,427,848
|
)
|
(309,596
|
)
|
(300,209
|
)
|
654,225
|
||||||
Minority
interest share of (income) loss of consolidated
subsidiaries
|
5,131
|
-
|
(13,684
|
)
|
-
|
||||||||
Loss
before benefit from income taxes
|
(3,422,717
|
)
|
(309,596
|
)
|
(313,893
|
)
|
654,225
|
||||||
Benefit
from income taxes
|
-
|
-
|
-
|
-
|
|||||||||
Net
income (loss)
|
$
|
(3,422,717
|
)
|
$
|
(309,596
|
)
|
$
|
(313,893
|
)
|
$
|
654,225
|
||
Loss
per common share- basic and diluted
|
$
|
(0.02
|
)
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
$
|
0.01
|
||
Weighted
average number of common shares outstanding- basic and
diluted
|
220,693,757
|
130,000,000
|
221,849,158
|
130,000,000
|
|
Number of
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Common
|
|
Common
|
|
Paid in
|
|
Retained
|
|
|
|
|||||
|
|
Shares
|
|
Stock
|
|
Capital
|
|
Earnings
|
|
Total
|
||||||
Balance, January
1, 2007
|
130,000,000
|
$
|
13,000
|
$
|
2,587,000
|
$
|
1,527,912
|
$
|
4,127,912
|
|||||||
Net
income
|
-
|
-
|
-
|
341,556
|
341,556
|
|||||||||||
Balance,
December 31, 2007
|
130,000,000
|
$
|
13,000
|
$
|
2,587,000
|
$
|
1,869,468
|
$
|
4,469,468
|
Number of
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
Common
|
|
Common
|
|
Paid in
|
|
Retained
|
|
|
|
|||||
|
|
Shares
|
|
Stock
|
|
Capital
|
|
Earnings (Deficit)
|
|
Total
|
||||||
Balance,
January 1, 2008
|
130,000,000
|
$
|
13,000
|
$
|
2,587,000
|
$
|
1,869,468
|
$
|
4,469,468
|
|||||||
Effect
of reverse acquisition
|
78,882,953
|
7,888
|
9,366,766
|
(11,082,853
|
)
|
(1,708,199
|
)
|
|||||||||
Issuance
of common stock for services (valued at $0.02 per share)
|
10,550,000
|
1,055
|
237,445
|
-
|
238,500
|
|||||||||||
Issuance
of common stock for debt (valued at $0.02 per share)
|
2,300,571
|
230
|
143,370
|
-
|
143,600
|
|||||||||||
Issuance
of common stock for interest (valued at $0.02 per share)
|
115,634
|
12
|
7,036
|
-
|
7,048
|
|||||||||||
Contribution
from stockholder
|
-
|
-
|
1,000
|
-
|
1,000
|
|||||||||||
Stock
based compensation expense
|
-
|
-
|
590,236
|
-
|
590,236
|
|||||||||||
Net
(loss)
|
-
|
-
|
-
|
(3,422,717
|
)
|
(3,422,717
|
)
|
|||||||||
Balance,
September 30, 2008
|
221,849,158
|
$
|
22,185
|
$
|
12,932,853
|
$
|
(12,636,102
|
)
|
$
|
318,936
|
Nine Months Ended September 30,
|
|
||||||
|
|
2008
|
|
2007
|
|||
Cash flows from operating activities:
|
|||||||
Net
loss
|
$
|
(3,422,717
|
)
|
$
|
(309,596
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|||||||
Depreciation
and amortization
|
25,377
|
-
|
|||||
Non-cash
compensation
|
245,548
|
-
|
|||||
Impairment
of fixed asset
|
138,127
|
||||||
Loss
on intellectual property
|
122,742
|
||||||
Compensatory
element of option issuance
|
590,236
|
-
|
|||||
Minority
interest in income (losses) of
|
|||||||
consolidated
subsidiaries
|
(5,131
|
)
|
-
|
||||
Changes
in operating assets
|
|||||||
and
liabilities
|
(200,243
|
)
|
-
|
||||
Net
cash used in operating activities
|
(2,506,061
|
)
|
(309,596
|
)
|
|||
Cash
flows from investing activities:
|
|||||||
Decrease
in investments
|
2,988,785
|
309,596
|
|||||
Cash
received upon acquisition
|
57,633
|
-
|
|||||
Net
cash provided by investing activities
|
3,046,418
|
309,596
|
|||||
Cash
flows from financing activities:
|
|||||||
Proceeds
from loans
|
219,863
|
-
|
|||||
Repayment
of loan
|
(60,000
|
)
|
-
|
||||
Proceeds
from minority interest
|
5,862
|
-
|
|||||
Net
cash provided by financing activities
|
165,725
|
-
|
|||||
Net
increase in cash
|
706,082
|
-
|
|||||
Cash
- Beginning of period
|
-
|
-
|
|||||
Cash
- End of period
|
$
|
706,082
|
$
|
-
|
Nine Months Ended September 30,
|
|
||||||
|
|
2008
|
|
2007
|
|||
Supplementary information:
|
|||||||
Changes in operating assets and liabilities consists of:
|
|||||||
(Increase)
decrease in prepaid expenses
|
$
|
1,914
|
$
|
-
|
|||
Increase
in accounts payable and accrued expenses
|
(202,157
|
)
|
-
|
||||
$
|
(200,243
|
)
|
$
|
-
|
|||
Non-cash
financing activities:
|
|||||||
Issuance
of common stock for debt
|
$
|
143,600
|
$
|
-
|
|||
Issuance
of common stock in lieu of payment of accrued expenses
|
$
|
7,048
|
$
|
-
|
|||
Issuance
of common stock for services
|
$
|
238,500
|
$
|
-
|
September
30,
|
December
31,
|
||||||
2008
|
2007
|
||||||
Public
securities
|
$
|
—
|
$
|
322,300
|
|||
Private
securities
|
—
|
5,556,720
|
|||||
Current
investments
|
—
|
5,879,020
|
|||||
Oil
and gas concessions
|
1,720,235
|
1,130,000
|
|||||
$
|
1,720,235
|
$
|
7,009,020
|
September
30,
|
December
31,
|
||||||
2008
|
2007
|
||||||
Equipment
|
$
|
316,908
|
$
|
—
|
|||
Leasehold
improvements
|
7,807
|
—
|
|||||
324,715
|
—
|
||||||
Less
accumulated depreciation
|
116,256
|
—
|
|||||
$
|
208,194
|
$
|
—
|
September
30,
|
December
31,
|
||||||
2008
|
2007
|
||||||
Gross
Carrying Amount
|
$
|
143,000
|
$
|
—
|
|||
Accumulated
Amortization
|
143,000
|
—
|
|||||
Intellectual
property costs
|
$
|
—
|
$
|
—
|
5. |
INVESTMENT
IN JOINT VENTURES
|
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.
|
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 owns 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
homes under Section 124. During the first quarter of 2007, the
activities
associated with this joint venture were discontinued and the
land deposit
was returned to the joint venture.
|
In
November 2006, the Company entered into a new joint venture to
develop
Section 124 housing in Puerto Rico. The Company became the general
partner
and 35% minority owner of limited partnership, Delta TA, LP formed
to
manage the construction and related activities to build approximately
338
residential units under the Section 124 program. As of the quarter
ended
September 30, 2007, the Puerto Rico housing development activities
associated with this partnership 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.
|
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 for
$2. The
Company and Hi-Tech each own forty-five percent (45%) of the
joint
venture.
|
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 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.
|
The
income and losses from operations of these entities and their
respective
minority interests have been reflected in the Company's statement
of
operations for the nine and three months ended September 30,
2008. 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 September 30, 2008 and December 31,
2007.
|
September
30,
|
December
31,
|
||||||
2008
|
2007
|
||||||
Delta
Development Partners L.P.
|
$
|
83,790
|
$
|
—
|
|||
Delta
Development Partners II, L.P.
|
37,718
|
—
|
|||||
Delta
TA L.P.
|
105,020
|
—
|
|||||
Delta
Developers Corp.
|
—
|
—
|
|||||
Delta
Developers Guayanilla Corp.
|
—
|
—
|
|||||
Delta-Envirotech,
Inc.
|
—
|
—
|
|||||
PT
Triyudha - Envirotech
|
—
|
—
|
|||||
$
|
226,528
|
$
|
—
|
2008
|
$
|
253,740
|
||
$
|
253,740
|
September 30,
2008
|
December 31,
2007
|
||||||
Professional
fees
|
$
|
12,500
|
$
|
—
|
|||
Interest
expense
|
57,445
|
—
|
|||||
Payroll
expense
|
614,507
|
—
|
|||||
Payroll
expense-officers
|
38,068
|
—
|
|||||
Payroll
tax expense
|
41,464
|
—
|
|||||
Accrued
consulting fees
|
144,000
|
—
|
|||||
Other
accrued expenses
|
379,467
|
—
|
|||||
$
|
1,287,461
|
$
|
—
|
Nine Months Ended
September 30,
|
Three Months Ended
September 30,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Total
Revenue:
|
|||||||||||||
North
America
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
|||||
South
America
|
(2,051,672
|
)
|
(313,859
|
)
|
1,339
|
653,186
|
|||||||
Indonesia
|
—
|
—
|
—
|
—
|
|||||||||
Middle
East
|
22,008
|
—
|
22,008
|
—
|
|||||||||
Puerto
Rico
|
—
|
—
|
—
|
—
|
|||||||||
$
|
(2,029,664
|
)
|
$
|
(313,859
|
)
|
$
|
23,347
|
$
|
653,186
|
||||
Loss
from Operations:
|
|||||||||||||
North
America
|
$
|
(1,161,245
|
)
|
$
|
—
|
$
|
(217,131
|
)
|
$
|
—
|
|||
South
America
|
(2,053,033
|
)
|
(309,596
|
)
|
(283
|
)
|
654,225
|
||||||
Indonesia
|
28,250
|
—
|
—
|
—
|
|||||||||
Middle
East
|
(238,960
|
)
|
—
|
(69,881
|
)
|
—
|
|||||||
(18,795
|
)
|
—
|
(4,589
|
)
|
—
|
||||||||
$
|
(3,443,783
|
)
|
$
|
(309,596
|
)
|
$
|
(291,884
|
)
|
$
|
654,225
|
Options
|
Shares
|
Weighted-Average
Exercise Share Price
|
Weighted-
Average
Remaining
Contractual
Term
|
Aggregate
Intrinsic
Value
|
|||||||||
Outstanding
at January 1, 2008
|
7,978,000
|
$
|
0.11
|
||||||||||
Options
granted
|
-
|
$
|
-
|
||||||||||
Options
exercised
|
-
|
$
|
-
|
||||||||||
Options
cancelled/expired
|
(4,478,000
|
)
|
$
|
0.11
|
|
||||||||
Outstanding
at September 30, 2008
|
3,500,000
|
$
|
0.11
|
2.6
|
$
|
(140,000
|
)
|
||||||
Exercisable
at September 30, 2008
|
3,500,000
|
$
|
0.11
|
2.6
|
—
|
Ø
|
changes
in laws and regulations, import, export and use of products, environmental
protection, climate change and energy security, all of which may
increase
costs or reduce the demand for our products;
|
Ø
|
currency
fluctuations;
|
Ø
|
changes
in tariffs and taxes;
|
Ø
|
political
and economic instability;
|
Ø
|
expropriation
of our assets and properties; and
|
Ø
|
refusal
to extend or grant, or delay in the extension or grant of, energy
production or development
contracts.
|
10.37a |
Amendment
dated as of September 2, 2008 to 6% Promissory Note in the principal
amount of
$21,000.
|
10.37b |
Amendment
dated as of September 18, 2008 to 6% Promissory Note in the principal
amount of
$100,000.
|
10.38a |
Amendment
dated as of October 8, 2008 to 6% Promissory Note in the principal
amount
of
$20,000.
|
10.39a |
Amendment
dated as of October 10, 2008 to 6% Promissory Note in the principal
amount
of
$9,550.
|
10.40a |
Amendment
dated as of November 4, 2008 to 6% Promissory Note in the principal
amount
of
$16,900.
|
10.42 |
6%
Promissory Note dated as of July 7, 2008 by Delta Mutual, Inc. to
Security
Systems International, Inc. in the principal amount of
$22,413.
|
10.43 |
6%
Promissory Note dated as of September 18, 2008 by Delta Mutual, Inc.
to
Egani, Inc.
in
the principal amount of $13,350.
|
10.44 |
6%
Promissory Note dated as of September 19, 2008 by Delta Mutual, Inc.
to
Security
Systems
International, Inc. in the principal amount of
$16,650.
|
10.45 |
6%
Promissory Note dated as of October 3, 2008 by Delta Mutual, Inc.
to
Santiago Peralta
in
the principal amount of $10,000.
|
10.46 |
6%
Promissory Note dated as of October 22, 2008 by Delta Mutual, Inc.
to
Security Systems International, Inc. in the principal amount of
$28,500.
|
31.1 |
Certification
of Principal 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 Principal Executive Officer Pursuant to 18 U.S.C. Section 1350
as
adopted
pursuant to Section 906 of the Sarbanes-Oxley 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 Oxley Act of
2002.
|
DELTA
MUTUAL, INC.
|
|
BY:
|
/s/
Malcolm W. Sherman
|
Malcolm
W. Sherman
|
|
Executive
Vice President and
|
|
Principal
Executive Officer
|
10.37a |
Amendment
dated as of September 2, 2008 to 6% Promissory Note in the principal
amount of
$21,000,
filed herewith.
|
10.37b |
Amendment
dated as of September 18, 2008 to 6% Promissory Note in the principal
amount of
$100,000,
filed herewith.
|
10.38a |
Amendment
dated as of October 8, 2008 to 6% Promissory Note in the principal
amount
of
$20,000,
filed herewith.
|
10.39a |
Amendment
dated as of October 10, 2008 to 6% Promissory Note in the principal
amount
of
$9,550,
filed herewith.
|
10.40a |
Amendment
dated as of November 4, 2008 to 6% Promissory Note in the principal
amount
of
$16,900,
filed herewith.
|
10.42 |
6%
Promissory Note dated as of July 7, 2008 by Delta Mutual, Inc. to
Security
Systems
International,
Inc. in the principal amount of $22,413, filed
herewith.
|
10.43 |
6%
Promissory Note dated as of September 18, 2008 by Delta Mutual, Inc.
to
Egani, Inc.
in
the principal amount of $13,350, filed
herewith.
|
10.44 |
6%
Promissory Note dated as of September 19, 2008 by Delta Mutual, Inc.
to
Security
Systems
International, Inc. in the principal amount of $16,650, filed
herewith.
|
10.45 |
6%
Promissory Note dated as of October 3, 2008 by Delta Mutual, Inc.
to
Santiago Peralta
in
the principal amount of $10,000, filed
herewith.
|
10.46 |
6%
Promissory Note dated as of October 22, 2008 by Delta Mutual, Inc.
to
Security Systems
International,
Inc. in the principal amount of $28,500, filed
herewith.
|
31.1 |
Certification
of Principal 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 Principal 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.
|
DELTA
MUTUAL, INC.
|
EGANI,
INC.
|
|||
(COMPANY)
|
(LENDER)
|
|||
By:
|
/s/
Malcolm W. Sherman
|
By:
|
/s/
Daniel Peralta
|
|
Malcolm
W. Sherman
|
Daniel
Peralta
|
|||
Executive
Vice President
|
President
|
DELTA
MUTUAL, INC.
|
SECURITY
SYSTEMS INTERNATIONAL, INC.
|
|||
(COMPANY)
|
(LENDER)
|
|||
By:
|
/s/
Martin G. Chilek
|
By:
|
/s/
Malcolm W. Sherman
|
|
Martin
G. Chilek
|
Malcolm
W. Sherman
|
|||
Sr.
Vice President
|
President
|
DELTA
MUTUAL, INC.
(COMPANY)
|
SECURITY
SYSTEMS INTERNATIONAL, INC.
(LENDER)
|
|||
By: |
/s/
Martin G. Chilek
|
By:
|
/s/
Malcolm W. Sherman
|
|
Martin
G. Chilek
|
Malcolm
W. Sherman
|
|||
Sr.
Vice President
|
President
|
DELTA
MUTUAL, INC.
|
EGANI,
INC.
|
|||
(COMPANY)
|
(LENDER)
|
|||
By:
|
/s/
Malcolm W. Sherman
|
By:
|
/s/
Daniel Peralta
|
|
Malcolm
W. Sherman
|
Daniel
Peralta
|
|||
Executive
Vice President
|
President
|
DELTA
MUTUAL, INC.
|
SECURITY
SYSTEMS INTERNATIONAL, INC.
|
|||
(COMPANY)
|
(LENDER)
|
|||
By:
|
/s/
Martin G. Chilek
|
By:
|
/s/
Malcolm W. Sherman
|
|
Martin
G. Chilek
|
Malcolm
W. Sherman
|
|||
Sr.
Vice President
|
President
|
$22,413
|
July
7, 2008
|
Sellersville,
Pennsylvania
|
1.1 |
"Company"
includes the corporation initially executing this Note and any Person
which shall succeed to or assume the obligations of the Company under
this
Note.
|
1.2 |
"Event
of Default" has the meaning given in Section 5
hereof.
|
1.3 |
"Lender"
shall mean the Person specified in the introductory paragraph of
this
Note.
|
1.4 |
“Maturity
Date" shall mean the date on which the Company receives demand for
payment, in writing, from the Lender.
|
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.
|
DELTA
MUTUAL, INC.
|
|
a
Delaware corporation
|
|
By:
|
/s/
Peter F. Russo
|
Name:
Peter
F. Russo
|
|
Title:
President
& CEO
|
$13,350
|
September
18, 2008
|
Sellersville,
Pennsylvania
|
1.1 |
"Company"
includes the corporation initially executing this Note and any Person
which shall succeed to or assume the obligations of the Company under
this
Note.
|
1.2 |
"Event
of Default" has the meaning given in Section 5
hereof.
|
1.3 |
"Lender"
shall mean the Person specified in the introductory paragraph of
this
Note.
|
1.4 |
"Maturity
Date" shall mean November 30, 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 liability
Company, an unincorporated association, a joint venture or other
entity or
a governmental authority.
|
DELTA
MUTUAL, INC.
|
|
a
Delaware corporation
|
|
By:
|
/s/
Malcolm W. Sherman
|
Name:
|
Malcolm
W. Sherman
|
Title:
|
Executive
Vice President
|
and
Principal Executive Officer
|
$16,650
|
September
19, 2008
|
Sellersville,
Pennsylvania
|
1.1 |
"
Company
"
includes
the corporation initially executing this Note and any Person
which
shall succeed to or assume the obligations of the Company under this
Note.
|
1.2 |
"Event
of Default" has the meaning given in Section 5
hereof.
|
1.3 |
“Lender"
shall mean the Person specified in the introductory paragraph of
this
Note.
|
1.4 |
"Maturity
Date" shall mean the date on which the Company receives demand for
payment, in writing, from the
Lender.
|
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 liability
Company, an unincorporated association, a joint venture or other
entity or
a governmental authority.
|
DELTA
MUTUAL, INC.
|
|
a
Delaware corporation
|
|
By:
|
/s/
Martin G. Chilek
|
Name:
|
Martin
G. Chilek
|
Title:
|
Sr.
Vice President & CFO
|
$10,000
|
October
3, 2008
|
Sellersville,
Pennsylvania
|
1.1 |
"Company"
includes the corporation initially executing this Note and any Person
which shall succeed to or assume the obligations of the Company under
this
Note.
|
1.2 |
“Event
of Default” has the meaning given in Section5
hereof.
|
1.3 |
“Lender”
shall mean the Person specified in the introductory paragraph of
this
Note.
|
1.4 |
“Maturity
Date” shall mean the date on which the Company receives demand of payment,
in writing, from the Lender.
|
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 liability
Company, an unincorporated association, a joint venture or other
entity or
a government authority.
|
DELTA
MUTUAL, INC.
|
|
a
Delaware corporation
|
|
By:
|
/s/
Malcolm W. Sherman
|
Name:
|
Malcolm
W. Sherman
|
Title:
|
Executive
Vice President &
|
Principal
Executive Officer
|
$28,500
|
October
22, 2008
|
Sellersville,
Pennsylvania
|
1.1 |
"Company"
includes the corporation initially executing this Note and any Person
which shall succeed to or assume the obligations of the Company under
this
Note.
|
1.2 |
“Event
of Default” has the meaning given in Section5
hereof.
|
1.3 |
“Lender”
shall mean the Person specified in the introductory paragraph of
this
Note.
|
1.4 |
“Maturity
Date” shall mean the date on which the Company receives demand for
payment, in writing, from the
Lender.
|
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 liability
Company, an unincorporated association, a joint venture or other
entity or
a government authority.
|
DELTA
MUTUAL, INC.
|
|
a
Delaware corporation
|
|
By:
|
/s/
Martin G. Chilek
|
Name:
|
Martin
G. Chilek
|
Title:
|
Sr.
Vice President & CFO
|
1. |
I
have reviewed this quarterly report on Form 10-Q 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
registrant as of, and for, the periods presented in this report;
|
4. |
The
registrant's other certifying officer(s) and I are responsible
for
establishing
and maintaining disclosure controls and procedures (as
defined
in Exchange Act Rules
13a-15(e)
and 15d-15(e)) and internal controls over financial reporting (as
defined
in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the registrant
and have:
|
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
registrant,
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 registrant'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 registrant’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 registrant's internal control over
financial
reporting; and
|
5. |
The
registrant's other certifying officer(s) and I have disclosed,
based
on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit
committee
of the registrant’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 registrant'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 registrant's
internal
control over financial reporting.
|
Date:
November 18, 2008
|
/s/
Malcolm W. Sherman
|
|
Malcolm
W. Sherman
|
||
Executive
Vice President
|
1. |
I
have reviewed this quarterly report on Form 10-Q 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
registrant as of, and for, the periods presented in this report;
|
4. |
The
registrant's other certifying officer(s) and I are responsible for
establishing
and maintaining disclosure controls and procedures (as
defined
in Exchange Act Rules
13a-15(e)
and 15d-15(e)) and internal controls over financial reporting (as
defined
in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the
registrant and have:
|
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
registrant,
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 registrant'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 registrant’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 registrant's internal control over
financial
reporting; and
|
5. |
The
registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over
financial reporting, to the registrant'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 registrant'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 registrant's
internal
control over financial reporting.
|
Date:
November 18, 2008
|
/s/
Martin G. Chilek
|
Martin
G. Chilek
|
|
Chief
Financial Officer
|
/s/
Malcolm W. Sherman
|
Malcolm
W. Sherman
|
Executive
Vice President
|
Chief
Financial Officer
|