FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C.


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

      For the quarterly period ended June 30, 2004

                                       OR

{_} 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


                               DELTA MUTUAL, INC.
             (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
                                 (215) 258-2800
             (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.

YES  X  NO __

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

At August 9, 2004,  there were  13,590,688  shares of Common  Stock,  $.0001 par
value, outstanding.

<PAGE>

                               DELTA MUTUAL, INC.

                                      INDEX

                                                                            Page

Part I  Financial Information

Item 1  Financial Statements

Balance Sheets as of June 30, 2004 (unaudited)                                 2

Statements of Operations for the Six Months Ended
  June 30, 2004 and 2003 (unaudited) and the Period November 17, 1999
  (Date of Formation) through June 30, 2004                                    3

Statements of Cash Flows for the Six Months Ended June 30, 2004 and
  2003 (unaudited) and the Period November 17, 1999 (Date of Formation)
  through June 30, 2004                                                   4 - 5

Notes to Financial Statements (unaudited)                                 6 - 12

Item 2  Management's Discussion and Analysis of Financial Condition
  and Results of Operations                                              13 - 19

Item 14 Controls and Procedures                                               19

Part II Other Information

Item 1  Legal Proceedings                                                     20

Item 2  Changes in Securities                                                 20

Item 3  Defaults upon Senior Securities                                       20

Item 4  Submission of Matters to a Vote of Security Holders                   20

Item 5  Other Information                                                     20

Item 6  Exhibits and Reports on Form 8-K                                      20

Signatures                                                                    21


                                     Page ii

<PAGE>

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, 2003.

      The results of operations  for the six months ended June 30, 2004 and 2003
are not necessarily  indicative of the results for the entire fiscal year or for
any other period.


<PAGE>

                                DELTA MUTUAL INC.
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEET

                                     ASSETS

                                                                  June 30
                                                              -----------------
                                                                    2004
                                                              -----------------
                                                                (Unaudited)
Current Assets:
   Cash                                                             $    18,013
   Loan receivable - former officer/stockholder                          51,221
   Prepaid expenses                                                          40
                                                                    -----------
         Total Current Assets                                            69,274

Fixed assets - net                                                       31,354
Investment in joint ventures                                            169,861
Capitalized construction costs                                          120,000
Other assets                                                              1,400
                                                                    -----------
                                                                        322,615
                                                                    -----------

        TOTAL ASSETS                                                $   391,889
                                                                    ===========

                   LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current Liabilities:
   Accounts payable                                                 $   186,451
   Accrued expenses                                                     228,970
   Notes payable related party                                          363,900
   Due to related party                                                 110,577
                                                                    -----------
        Total Current Liabilities                                       889,898
                                                                    -----------

Minority interest in subsidiaries                                       131,540
                                                                    -----------

Commitments and Contingencies

Stockholders' Deficiency:
   Common stock $0.0001 par value - authorized
     20,000,000 shares; 13,590,688
     shares issued and outstanding                                        1,359
   Additional paid-in-capital                                         1,825,997
   Deficit accumulated during
     the development stage                                           (2,456,905)
                                                                    -----------
        Total Stockholders' Deficiency                                 (629,549)
                                                                    -----------

        TOTAL LIABILITIES AND
          STOCKHOLDERS'  DEFICIENCY                                 $   391,889
                                                                    ===========


           See notes to consolidated unaudited financial statements.

                                       -2-

<PAGE>

                                DELTA MUTUAL INC.
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                                  Period from
                                                                                                               November 17, 1999
                                            Six Months Ended June 30,          Three Months Ended June 30,    (Date of Formation)
                                          ------------------------------------------------------------------        through
                                              2004              2003              2004              2003         June 30, 2004
                                          ------------      ------------      ------------      ------------      ------------
<S>                                       <C>               <C>               <C>               <C>               <C>
Revenue                                   $         --      $         --      $         --      $         --      $         --
                                          ------------      ------------      ------------      ------------      ------------

Costs and Expenses
   General and administrative
     expenses                                 (606,923)         (564,011)         (327,418)         (449,211)       (2,353,015)
                                          ------------      ------------      ------------      ------------      ------------

   Net loss from operations                   (606,923)         (564,011)         (327,418)         (449,211)       (2,353,015)
                                          ------------      ------------      ------------      ------------      ------------

   Interest expense                            (11,370)          (32,559)           (2,998)          (31,659)          (54,678)
   Minority interest in losses of
     consolidated subsidiaries                  24,728                --            16,119                --            24,728
   Equity in losses of joint ventures          (73,939)               --           (38,880)               --           (73,939)
                                          ------------      ------------      ------------      ------------      ------------
                                               (60,581)          (32,559)          (25,759)          (31,659)         (103,889)
                                          ------------      ------------      ------------      ------------      ------------

   Net loss                               $   (667,504)     $   (596,570)     $   (353,177)     $   (480,870)     $ (2,456,904)
                                          ============      ============      ============      ============      ============

   Loss per common share -
     basic and diluted                    $       0.06      $       0.09      $       0.03      $       0.07
                                          ============      ============      ============      ============

   Weighted average number of
     common shares outstanding-
     basic and diluted                      11,437,510         6,962,333        13,160,248         6,994,386
                                          ============      ============      ============      ============
</TABLE>


            See notes to consolidated unaudited financial statements.

                                       -3-
<PAGE>

                                DELTA MUTUAL INC.
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                        Period
                                                                                   November 17, 1999
                                                      Six Months Ended June 30,   (Date of Formation)
                                                    ----------------------------        through
                                                       2004              2003        June 30, 2004
                                                    -----------      -----------     -------------
<S>                                                 <C>              <C>             <C>
Cash flows from operating activities:
   Net loss                                         $  (667,504)     $  (596,570)     $(2,456,904)
   Adjustment to reconcile net loss to net cash
     used in operating activities:
   Depreciation                                             879               98            2,638
   Non-cash compensation                                188,580          200,250          615,592
   Equity in losses of joint ventures                    73,939               --           73,939
   Minority interest in losses of
     consolidated subsidiaries                          (24,727)              --          (24,727)
   Bad debt                                                  --               --           96,625
   Changes in operating assets
     and liabilities:                                   (52,123)         221,945          388,234
                                                    -----------      -----------      -----------
Net cash used in operating activities:                 (480,956)        (174,277)     $(1,304,603)
                                                    -----------      -----------      -----------

Cash flows from investing activities:
   Purchase of fixed assets                                  --             (985)         (33,992)
   Advances to joint ventures                          (103,123)         (52,500)        (218,223)
                                                    -----------      -----------      -----------
Net cash used in investing activities                  (103,123)         (53,485)        (252,215)
                                                    -----------      -----------      -----------

Cash flows from financing activities:
   Proceeds from sale of common stock                   142,500               --          295,750
   Proceeds from loans                                  363,900               --          904,644
   Repayment of loans                                        --               --         (540,744)
   Proceeds from convertible debt                            --               --          250,000
   Proceeds from former officer and stockholder              --          203,630          570,411
   Proceeds from minority interest                      148,000               --          148,150
   Repayment to former officer and stockholder          (56,364)                         (165,379)
   Proceeds from related party                               --           22,000          187,000
   Repayment to related parties                         (10,000)                          (75,000)
                                                    -----------      -----------      -----------
   Net cash provided by
     financing activities                               588,036          225,630        1,574,832
                                                    -----------      -----------      -----------

   Net (decrease) increase in cash                        3,957           (2,132)          18,014
   Cash - Beginning of period                            14,057            2,871               --
                                                    -----------      -----------      -----------
   Cash - End of period                             $    18,014      $       739      $    18,014
                                                    ===========      ===========      ===========
</TABLE>

            See notes to consolidated unaudited financial statements.

                                       -4-
<PAGE>

                                DELTA MUTUAL INC.
                          (A DEVELOPMENT STAGE COMPANY)
                CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                            Period
                                                                                       November 17, 1999
                                                            Six Months Ended June 30, (Date of Formation)
                                                            -------------------------      through
                                                               2004           2003      June 30, 2004
                                                             ---------     ---------    -------------
<S>                                                          <C>           <C>           <C>
Non-cash financing activities:
Issuance of common stock for
  promissory note                                            $      --     $      --     $ 458,630
                                                             =========     =========     =========
Offset of note receivable and
  convertible debt in connection
  with termination agreement                                 $      --     $      --     $ 253,638
                                                             =========     =========     =========
Issuance of common stock for debt                            $      --     $      --     $      --
                                                             =========     =========     =========
Offset of note receivable to
  liquidate loan to officer                                  $      --     $      --     $ 350,000
                                                             =========     =========     =========
Issuance of common stock for
  investment in unconsolidated subsidiary                    $   7,500     $      --     $  15,000
                                                             =========     =========     =========
Issuance of common stock in lieu
  of payment of accrued expenses                             $      --     $      --     $  93,625
                                                             =========     =========     =========
 Forgiveness of debt to former
   shareholder                                               $      --     $ 100,000     $ 398,653
                                                             =========     =========     =========

Supplementary information:
  Cash paid during year for:
     Interest                                                $      --     $      --     $      --
                                                             =========     =========     =========
     Income taxes                                            $      --     $      --     $      --
                                                             =========     =========     =========

Changes in operating assets and liabilities consists of:
  (Increase) in loan receivable                              $ (51,221)    $      --     $ (51,221)
  Decrease in prepaid expenses                                   3,922            --           (40)
  (Increase) decrease in other assets                         (120,750)         (650)     (121,400)
  Increase in accounts payable
     and accrued expenses                                      115,926       222,595       560,895
                                                             ---------     ---------     ---------
                                                             $ (52,123)    $ 221,945     $ 388,234
                                                             =========     =========     =========
</TABLE>

            See notes to consolidated unaudited financial statements.

                                       -5-
<PAGE>

                                DELTA MUTUAL INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.    BASIS OF PRESENTATION

      The  consolidated  balance sheet as of June 30, 2004, and the consolidated
statements of operations  and cash flows for the periods  presented  herein have
been  prepared  by  Delta  Mutual,  Inc.  (the  "Company"  or  "Delta")  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.

     DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      The Company's  consolidated financial statements for the period ended June
30, 2004 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 the  commencement  of its planned
principal  operations.  At June 30, 2004 operations had not yet commenced and no
revenue has been  derived;  accordingly  the Company is considered a development
stage  enterprise.  There is no assurance  the Company will achieve a profitable
level of operations.

      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.

      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 and 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.


                                      -6-
<PAGE>

      Organization

      The Company was incorporated under the name Delta Mutual, Inc. ("Delta" or
the  "Company") on November 17, 1999 in the State of Delaware.  The Company is a
development stage company and at that time prior Company management  intended to
provide mortgage  services through the Internet to borrowers having  substandard
credit. Prior management intended to offer varied levels of mortgage and lending
services by capitalizing on the popularity of Internet based financial  services
companies and secured the domain name rights to the name deltamutual.com.

      During its first year of  existence,  prior  management  believed  that it
would be able to fund the Company's intended  operations through the sale of its
common  stock.  The  Company's  common  stock is quoted on the  Over-the-Counter
Electronic Bulletin Board under the symbol "DLTM". At the time of its formation,
companies with Internet based  businesses were treated  favorably in the capital
markets. In 2000, however, the market for the stock of Internet based businesses
deteriorated  substantially and many such companies went out of business because
they were  unable  to  generate  sufficient  revenues  and were  unable to raise
additional capital.

      From inception  through June 30, 2004, the Company raised a limited amount
of capital  through the sale of common stock:  during the period from  inception
through  December 31, 2001, it raised $10,750  through such private  placements,
and raised  $30,000 in  December,  2002,  raised  $112,500 in 2003 and  $142,500
during the six months ended June 30, 2004 through investments.  These funds were
not sufficient to capitalize any of the Company's business plans.

      Prior Operations

      In April 2001,  Kelcon,  Inc.  ("Kelcon"),  a company  newly  organized by
Kenneth A. Martin,  acquired a controlling  interest  (450,000  shares) in Delta
with  a  view  to  acquiring   the  assets  of   Enterprises   Solutions,   Inc.
("Enterprises").  Kelcon's  Delta  shares  were  acquired  from  two of  Delta's
directors, James E. Platek (300,000 shares) and Bonnie Cunningham (150,000), for
which Kelcon paid a total of $450,000.  Mr.  Martin paid $75,000 of the purchase
price for Delta's shares,  and an overseas investor who had previously  invested
in Enterprises paid $375,000,  for which Kelcon issued a 20% promissory note due
October 31,  2001.  The  investor  had the right to convert  $100,000  principal
amount of the note into 100,000 shares of Kelcon's Delta stock.  As part of this
transaction,  Mr. Platek,  Ms.  Cunningham,  and Delta's third director,  Robert
Franz,  resigned and appointed Mr. Martin as Delta's sole  director.  Mr. Martin
then  appointed  Mr.  Sailor  H.  Mohler  and Mr.  Phillip  Chung as  additional
directors.

      In May 2000,  prior Company  management  entered into an Agreement of Sale
pursuant to which Delta was to acquire  substantially all Enterprises' assets in
exchange for  approximately  11,068,307  shares of Delta's common stock. In June
2001,  prior  Company  management  prepared  and filed with the  Securities  and
Exchange  Commission  a  registration  statement  for the shares to be issued to
Enterprises' stockholders, with a view to consummating the acquisition.


                                      -7-
<PAGE>

      Due to the death of  Enterprises'  president,  the  Agreement of Sale with
Enterprises  was  terminated  and  the  Company's   registration  statement  was
withdrawn.  Shortly  thereafter,  Messrs.  Sailor H.  Mohler and  Phillip  Chung
resigned as directors of the Company.

      In August,  2002, prior Company management  executed a letter of intent to
merge with Helvetia  Pharmaceuticals,  Inc. After a due diligence period,  prior
Company  management  terminated  negotiations and that proposed  transaction was
never consummated.

      Change of Control

      In November,  2002,  Kelcon,  Inc.  contracted for the sale of its 450,000
Company  common  shares to Mr. Gary T.  Robinson,  a New York  businessman,  for
$275,000 in a private  transaction.  This  transaction  represented a "Change in
Control"  for the  Company.  As part of this  transaction,  on March  10,  2003,
Kenneth A. Martin  appointed  Mr. Gary  Robinson and Mr. Peter Russo to serve as
members of the Board of Directors.  On March 11, 2003 Mr. Robinson was appointed
as Chief Executive Officer and Chairman of the Board of Directors, and Mr. Russo
was appointed as President and  Secretary.  Thereafter,  on March 11, 2003,  Mr.
Martin resigned as an officer and director of the Company.  On June 11, 2003 Mr.
Robinson resigned as Chief Executive Officer and Mr. Russo was appointed to that
office. On November 28, 2003 Mr. Robinson resigned as a director.

Business Plan

      Since the change in control,  new Company  management  has embarked upon a
new mission and strategic direction,  by establishing joint venture subsidiaries
and a limited partnership, primarily to establish business operations focused on
providing  construction  and  environmental  technologies and services in Puerto
Rico, the Middle East, Africa and the Far East.

Puerto Rico

      The Company formed a majority owned joint venture in Puerto Rico to manage
the  construction and related  activities  required to build low income homes in
Puerto  Rico under the  Federal  Government's  Section  124 low  income  housing
program.  In December 2003, the Company  secured the purchase rights to 36 acres
that are designated Section 124 eligible. Approximately 270 low-income homes are
planned for construction on this property.

Middle East, Africa and Far East

      The  Company  intends to  establish  local  operating  joint  ventures  in
specific  countries in the Middle East and the Far East primarily  aimed at soil
and water reclamation.  The initial step of forming a strategic alliance leading
to a joint  venture  has been  established  with a local  organization  in Saudi
Arabia,  and  discussions  are  underway in  Indonesia.  The Company  intends to
provide only environmental  remediation services in Africa as these projects are
primarily funded by international financial institutions.


                                      -8-
<PAGE>

Central and Eastern Europe

      The Company has made a strategic  decision to minimize its  activities  in
Eastern  Europe and to maintain a small passive  investment in the area that can
be expanded in the future if current  circumstances  change. While the potential
for significant  environmental  remediation  activity remains,  local government
priorities  and hard  currency  shortages  relegate  these  activities  to a low
status.

SIGNIFICANT ACCOUNTING POLICIES

      PRINCIPLES OF CONSOLIDATION

      The consolidated  financial statements include the accounts of the Company
and its  subsidiaries.  All  intercompany  transactions  and balances  have been
eliminated.

      INVESTMENTS

      The Company has  investments  of 50% or less in associated  companies that
are  accounted  for under the equity  method and are included in  Investment  in
Joint Ventures on the Company's  balance sheet at June 30, 2004.  Investments in
associated   companies  where  the  Company  has  a  controlling   interest  are
consolidated with the Company's operations unless otherwise disclosed.

      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

      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. There were no potential common shares  outstanding as of June
30, 2004 and 2003.

      REVENUE RECOGNITION ON CONSTRUCTION CONTRACTS

      Revenue and  profits in  construction  contracts  are  recorded  under the
percentage of completion  method.  Progress toward  completion is measured using
the cost to cost method. Under the cost to cost method, revenues and profits are
recognized based on the ratio that costs incurred bear to total estimated costs.
This  method is subject to  physical  verification  of actual  progress  towards
completion.


                                      -9-
<PAGE>

      EVALUATION OF LONG-LIVED ASSETS

      The Company reviews property and equipment for impairment  whenever events
or changes in  circumstances  indicate the carrying value may not be recoverable
in accordance  with guidance in SFAS No. 144  "Accounting  for the Impairment or
Disposal of Long-Lived  Assets." If the carrying value of the  long-lived  asset
exceeds the present value 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 OPTION PLAN

      The Company accounts for equity-based  compensation issued to employees in
accordance with Accounting  Principles  Board ("APB") Opinion No. 25 "Accounting
for Stock Issued to Employees".  APB No. 25 requires the use of intrinsic  value
method,  which measures  compensation  cost as the excess, if any, of the quoted
market  price of the stock at the  measurement  date over the amount an employee
must pay to acquire the stock.  The Company makes  disclosures  of pro forma net
earnings and earnings per share as if the fair-value-based  method of accounting
had  been  applied  as  required  by SFAS  No.123  "Accounting  for  Stock-Based
Compensation-Transition and Disclosure".

      In  December  2002,  the  FASB  issued  SFAS  No.  148,   "Accounting  for
Stock-Based   Compensation-Transition   and  Disclosure  an  amendment  of  FASB
Statement No. 123". SFAS No. 148 provides  alternative methods of transition for
a voluntary  change to the fair value based method of accounting for stock-based
employee  compensation.  It also requires  disclosure in both annual and interim
financial  statements  about the method of accounting for  stock-based  employee
compensation and the effect of the method used on reported results. SFAS No. 148
is effective for annual and interim  periods  beginning after December 15, 2002.
The Company will continue to account for stock-based employee compensation under
the  recognition  and  measurement  principle  of APB Opinion No. 25 and related
interpretations.

      The Company has adopted the  disclosure-only  provisions  of  Statement of
Financial   Accounting   Standards   No.  123,   "Accounting   for   Stock-Based
Compensation" (SFAS No.123) for stock options issued to employees.


                                      -10-
<PAGE>

      The Company is also  authorized to make stock awards to its employees from
the Plan. The Company has adopted the expense  provisions of SFAS No. 123 in the
issuance of stock  awards.  Stock awards are expensed at the time of issuance as
the common stock issued has no restrictions to the employees. The Company issued
stock awards to two employees totaling 179,000 shares from the Plan during 2004.
The  shares  were  issued  at fair  market  value  for  compensation  due to the
employees.  The Company recorded compensation expense of $14,000 and is included
in the Company's statement of operations for the six months ended June 30, 2004.

      STOCK-BASED COMPENSATION

      The  Company   issues   shares  of  its  common  stock  to  employees  and
non-employees as stock-based compensation. The Company accounts for the services
using the fair market value of the services  rendered.  For the six months ended
June 30, 2004 and 2003, the Company issued  1,320,000 and 510,000 common shares,
respectively,  and  recorded  compensation  expense of  $188,580  and  $200,250,
respectively, in connection with the issuance of these shares.

      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.

      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.


                                      -11-
<PAGE>

2.    LOAN RECEIVABLE - FORMER OFFICER/SHAREHOLDER

      During 2003, the Company  entered into a revolving  credit  agreement with
Gary Robinson  ("Robinson"),  the former Chairman and Chief Executive Officer of
the Company,  in the amount of $300,000.  The credit agreement bears interest at
the prime rate.  Robinson  advanced the Company  $515,383 and the Company repaid
Robinson $109,015 through June 30, 2004.

      Robinson  was a guarantor on a note  receivable  due the Company from CEVA
International Inc. ("CEVA"). CEVA did not pay the note and the Company exercised
its right by  reducing  the amount  owed on the  revolving  line of credit  with
Robinson in the amount of $250,000.

      In March 2003,  the  Company  entered  into a  consulting  agreement  with
M.U.R.G. and advanced M.U.R.G.  $100,000 against future compensation in the form
of a  promissory  note.  The project  did not go forward  and on June 16,  2003,
Robinson  agreed to assume  the  promissory  note from  M.U.R.G.  and reduce the
amount due him.

      On March 4, 2004,  the Company  paid  $121,508  to David Green  ("Green"),
which  constituted full and complete  repayment of a $100,000 loan made by Green
to  Robinson.  The loan was  secured by a pledge of Delta  Mutual,  Inc.  common
stock. The Company offset the payment to Green against the amount due Robinson.

      After adjustments for expense  reimbursements  due Robinson and offsets as
noted above, Robinson owed the Company $51,221 as of June 30, 2004.

      The Company  recorded  interest expense of $7,986 on the revolving line of
credit for the period  November  17, 1999 (date of  formation)  through June 30,
2004. No interest was recorded during the six months ended June 30, 2004.

3.    INVESTMENT IN JOINT VENTURES

a) In December  2003,  the  Company  formed a joint  venture  project to develop
government  sponsored,  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 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. The  operations  of the joint venture have been
consolidated with the Company for the three and six months ended June 30, 2004.

      From January 12, 2004 through  June 30,  2004,  Neil Berman,  an investor,
purchased a 25% interest in Delta Development Partners, LP for $148,000.


                                      -12-
<PAGE>

b) On March 18, 2003,  the Company  entered into a letter of intent with Hi-Tech
Consulting and Construction, Inc. ("Hi-Tech") to form a joint venture to provide
environmental  technology  services  primarily to markets in the Middle East and
Africa.  The joint venture company,  named  Delta-Envirotech,  Inc., is based in
Virginia and focuses on participating in foreign government  sponsored pollution
remediation projects. The joint venture agreement was concluded January 14, 2004
and Delta-Envirotech,  Inc., a Delaware Corporation,  was formed. As of December
31, 2003 the Company  expensed  $35,000  that was advanced to the Hi-Tech and is
included in the Company's  statement of operations  for the year ended  December
31, 2003. In 2004, the Company was unable to make payments due per the agreement
but Hi-Tech has  indefinitely  extended the date of the payments.

c) As of June 30, 2004, the Company owes the joint venture $106,877.  On January
14, 2004,  Delta and Hi-Tech  agreed to each sell 75 shares of the joint venture
to  Ali  Razmara,  representing  a ten  (10%)  percent  interest,  for  $2.  The
transaction becomes effective July 14, 2004.

      On January 22, 2004,  the Company  announced the conclusion of a strategic
alliance agreement between Delta-Envirotech,  Inc. and ZAFF International, Ltd.,
an advanced  technology  company located in Saudi Arabia. The strategic alliance
states that the two companies will jointly pursue  projects  related to soil and
water reclamation requirements in the Middle East.

      For the six months  ended June 30,  2004,  the Company  recorded a loss of
$73,939 from the joint venture.

d) On May 1, 2003, the Company entered into a joint venture in Romania,  forming
a new Company, Delta TP Mediu, SRL. The joint venture, of which the Company owns
10%, was organized to primarily pursue the sourcing, treatment and processing of
hydrocarbon based and other industrial residuals and, where possible,  to create
alternative fuels and raw materials for industrial use primarily in Romania. The
Company  invested  $33,800 in the joint venture,  consisting of $15,100 in cash,
the issuance of 100,000  shares of the Company's  common stock valued at $15,000
and a cash  obligation  of $3,700 to the joint  venture which is included in the
Due to Related Party amount on the Company's balance sheet at June 30, 2004.

e) On April 25, 2003, the Company entered into a letter of intent with Ms. Jamie
Burrows and Burrows  Consulting,  Inc., a Texas based corporation  (collectively
referred to as "Burrows")  to form a joint venture  company to be known as Delta
Specialty Services based in Houston,  Texas and was to engage in providing waste
remediation  technologies  and services on a project  basis to the United States
Government,  foreign  governments and their  respective  departments,  agencies,
political  sub-divisions  as well as to private  entities around the world.  The
funding  commitments were not accomplished on the established  timetable and the
joint venture has not commenced  operations.  The Company  expensed $75,000 that
had  been  advanced  to the  joint  venture  and is  included  in the  Company's
statement of operations for the year ended December 31, 2003.

      The following represents a schedule of investments as of June 30, 2004:


                     Delta-Envirotech, Inc.        $136,061
                     Delta TP Mediu                  33,800
                                                   --------
                                                   $169,861
                                                   ========


                                      -13-
<PAGE>

4.    ACCRUED EXPENSES

      Accrued expenses consist of the following:


                                                  June 30,
                                                   2004
                                                 --------
                      Professional fees          $  2,280
                      Consulting fees                 625
                      Interest expense              4,013
                      Payroll expense             208,443
                      Payroll tax expense          13,609
                                                 --------
                                                 $228,970
                                                 ========


5.    LOANS TO RELATED PARTIES

a) On January  7,  2003,  the  Company  borrowed  $15,000  from  Michael  Pisani
("Pisani") (a stockholder) of the Company.  Pisani received 50,000 common shares
of the Company's common stock which represented the payment of interest accruing
on the unpaid principal balance through January 27, 2003, the maturity date. The
Company  recorded  interest  expense of $15,000 in 2003 for the  issuance of the
shares.

      The Company did not pay the  outstanding  balance on the maturity date and
was required to pay monthly interest of one (1%) percent to Pisani.  On April 7,
2003, the Company repaid Pisani $5,000 against the outstanding  balance.  In May
2003,  the note was amended.  Subsequently,  a dispute arose between the parties
about the validity of the amendment.

      In March 2004, the Company repaid the principal and interest due under the
terms of the amended note.  Pisani,  through  counsel,  has informed the Company
that, by accepting  repayment,  he does not prejudice his position regarding the
validity  of the  original  note.  The  Company is  attempting  to resolve  this
dispute. If the matter can not be resolved and Pisani prevails in a legal action
against the  Company,  Pisani may be entitled  to, in addition to the  principal
amount and  interest  that he has received  from the  Company,  shares of common
stock as additional interest.

      The Company  recorded  interest expense of $1,599 for the six months ended
June 30, 2004 and $3,199 for the period  November  17, 1999 (date of  formation)
through June 30, 2004.

b. On May 15, 2003, the Company  borrowed $12,000 from Michael Fasci ("Fasci") a
stockholder of the Company. Fasci received 50,000 common shares of the Company's
common stock which represented the payment of interest through May 26, 2003, the
maturity date. The Company  recorded  interest  expense of $13,750 in connection
with the issuance of the shares.


                                      -14-
<PAGE>

      The Company did not pay the  outstanding  balance on the maturity date and
the amount of $12,000 was due as of December 31, 2003.  In  accordance  with the
agreement  the  Company  must pay  monthly  interest  of one (1%) to Fasci.  The
Company  recorded  interest expense in the amount of $240 and $1,080 for the six
months ended June 30, 2004,  and November 17, 1999 (date of  formation)  through
June 30, 2004. On February 27, 2004 the Company  issued 140,000 common shares in
repayment of the loan plus interest and penalty amounting to $18,705.

c. On December 30, 2003,  the Company  borrowed  $50,000 from Edward  Tuccio,  a
shareholder  of the Company.  The note is due  December 29, 2004,  interest at 6
(6%) per annum.  On February 11, 2004,  the Company issued Tuccio 400,000 common
shares of the Company's common stock which  represented the full payment of this
loan plus  interest  amounting  to $168,  which is included in the  statement of
operations  for the six months  ended June 30, 2004 and for the period  November
17, 1999 (date of formation) through June 30, 2004.

d. On  December  11,  2003,  the Company  borrowed  $50,000  from Neil Jones,  a
shareholder of the Company.  The note was due December 16, 2004 with interest at
six (6%) per annum. On January 24, 2004, the Company issued Jones 400,000 common
shares of the Company's common stock which  represented the full payment of this
loan plus interest.  The Company  recorded  interest expense of $63 and $195 for
the six months ended June 30, 2004 and for the period November 17, 1999 (date of
formation) through June 30, 2004, respectively.

e. The  Company  borrowed  $322,900  from  Neil  Berman  and  Ivano  Angelastri,
shareholders of the Company,  on various dates during the period ending June 30,
2004.  The loan bears  interest at four (4%) per annum and is due May 2006.  The
full amount of principal and accrued interest may be converted into common stock
of the Company at a conversion  price of $0.125 per share.  The Company recorded
interest expense of $3,773 and $1,088 for the six months ended June 30, 2004 and
for the period November 17, 1999 (date of formation) through June 30, 2004.

f. The Company borrowed $157,000 from Neil Berman, a shareholder of the Company,
of which  $41,000 was  received as of June 30, 2004 and the balance  received in
July 2004.  The loan bears  interest at 4% and  principal  and  interest are due
December  31,  2006.  The  outstanding  principal  and  accrued  interest  shall
automatically  be  converted  into  shares of the  Company's  common  stock at a
conversion price of $.05 per share.

6.    MINORITY INTERESTS

      Minority  interests  primarily  consists of a  twenty-five  (25%)  percent
ownership  interest in Delta  Development  Partners,  L.P.  and a fifteen  (15%)
percent ownership  interest in Delta Developers Corp. 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 six months ended June
30, 2004.  The amount on the  Company's  balance sheet  represents  the minority
interests as of June 30, 2004.

      The following  represents a schedule of minority  interests as of June 30,
2004:


               Delta Development Partners L.P.        $ 145,713
               Delta Developers Corp                    (14,173)
                                                      ---------
                                                      $ 131,540
                                                      =========


                                      -15-
<PAGE>

7.    STOCKHOLDER'S DEFICIENCY

a. The former president of the Company  purchased 300,000 shares of common stock
for $33 in November of 1999.  Such shares were issued  without  registration  in
reliance on an exemption in federal  security laws that permit issuance of stock
up to $1 million without registration of the securities.

b. In April 2001, Kelcon, Inc., a Delaware corporation, purchased 450,000 shares
of common stock from former officers of the Company,  in a private  transaction,
effectively changing the ownership of the Company.

c. During  November 2002,  Gary Robinson  contracted for the  acquisition of the
controlling equity position from Kelcon, Inc. in a private transaction.

d. On December 11, 2002,  Cyberlinx Inc.  purchased 300,000 restricted shares of
the Company's common stock for $30,000 at $.10 per share.

e. On January 12, 2003,  the Company  entered into an agreement with Ken Martin,
the  Company's  former  controlling  shareholder,  to  compensate  him for  past
services  rendered  to the  Company in the amount of  $12,454,  all of which was
accrued at December 31, 2002.  The Company issued 30,000 shares of the Company's
common stock on Form S-8 registration statement in full payment of the Company's
debt.

f. On February 4, 2003,  the Company and J. Dapray  Muir,  Esq. ( the  Company's
previous attorney) entered into an agreement to compensate him for past services
rendered to the  Company in the amount of  $34,669,  all of which was accrued at
December 31, 2002.  The Company  issued 50,000  shares of the  Company's  common
stock on a Form S-8  registration  statement  in full  payment of the  Company's
debt.

g. On  February  3, 2003,  the  Company and Peter  Russo,  an  executive  of the
Company,  entered into an agreement to compensate him for past services rendered
to the Company in the amount  $20,000,  all of which was accrued at December 31,
2002. The Company issued 40,000 shares of the Company's common stock on Form S-8
registration statement in full payment of the Company's debt

h. On February 10, 2003, the Company and Jerome Kindrachuk,  an executive of the
Company,  entered into an agreement to compensate him for past services rendered
to the  Company in the amount of  $20,000,  all of which was accrued at December
31, 2002. The Company  issued  200,000  shares of the Company's  common stock in
full payment of the Company's debt in February 2003.

i. On February 24, 2003,  the Board of Directors  effected a forward stock split
of five for one.  All  references  to common  stock after that date  reflect the
forward stock split.

j. On April 29, 2003, the Company and Peter Russo, the President of the Company,
entered into an agreement to compensate him in recognition of his commitment for
services in the amount of  $22,500.  The Company  issued  100,000  shares of the
Company stock in full payment of this debt.


                                      -16-
<PAGE>

k. On April 29,  2003,  the Company and Jerry  Kindrachuk,  an  executive of the
Company,  entered into an  agreement to  compensate  him in  recognition  of his
commitment  for services in the amount of $22,500.  The Company  issued  100,000
shares of the Company stock in full payment of this debt.

l. On April 29, 2003 the Company and Steven L. Gray,  entered  into an agreement
to  compensate  him for past  services  rendered to the Company in the amount of
$50,000.  The Company issued 100,000 shares of the Company stock in full payment
of this debt.

m. On April 29, 2003, the Company and Kevin  Forcier,  entered into an agreement
to  compensate  him for past  services  rendered to the Company in the amount of
$10,000.  The Company  issued 20,000 shares of the Company stock in full payment
of this debt.

n. On April 29,  2003,  the  Company  and T&T  Trading of  Zurich,  Switzerland,
entered into an agreement to compensate  them for past services  rendered in the
amount of $50,000.  The Company  issued  240,000  shares of the Company stock in
full payment of this debt.

o. On June 30, and July 23, 2003, the Company and Michael Kahn,  entered into an
agreements  to compensate  him for past services  rendered to the Company in the
amount of $16,500 and $16,500 respectively.  The Company issued 80,000 shares of
the Company stock in full payment of this debt.

p. On July 1, 2003, the Company entered into an agreement with Gary Robinson,  a
stockholder, former CEO and former chairman, to compensate him for past services
rendered  to the  Company  in the  amount  of  $93,625,  the  fair  value of the
services.  The Company issued  280,000  shares of the Company's  common stock on
Form S-8 registration statement in full payment of the Company's debt.

q. On August 8, 2003 the Company and Joseph Tomasek entered into an agreement to
compensate  him past  services  rendered in the amount of  $40,000.  The Company
issued 200,000 shares of the Company stock in full payment of this debt.

r. On August 8, 2003,  the Company and Peter Hallam entered into an agreement to
sell 100,000 shares of the Company's common stock for $50,000.

s. On August 11, 2003,  the Company and Joy Miller entered into an agreement for
compensation  of services  to the Company in the amount of $43,750.  The Company
issued 100,000 shares of the Company stock in full payment of this debt.

t. On August 22, 2003, the Company and Michael Kahn entered into an agreement to
sell 250,000 shares of the Company common stock for $50,000.

u. On November 15, 2003,  the Company and Neil Berman  entered into an agreement
to sell 100,000 shares of the Company common stock for $12,500.

      On November 15 and December  15, 2003 the Company and Neil Berman  entered
into consulting  agreements for  compensation and consulting for $8,500 and $850
respectively.  The Company issued 100,000 and 10,000 shares respectively in full
payment of this debt.


                                      -17-
<PAGE>

v. On November 21,  2003,  the Company and Nela  Pavaliou  and Business  Centres
International,  Inc.,  entered into an agreement for compensation of services in
the $1,750 for each.  The Company  issued  100,000  shares of the Company common
stock in full payment of this debt.

w. On January 14, 2004, the Company and David Razmara, entered into an agreement
to  compensate  him for past  services  rendered to the Company in the amount of
$4,125,all of which was accrued at December 31, 2003.  The Company issued 50,000
shares of the Company's common stock in full payment of this debt.

x. In February 2004, the Company sold 300,000 shares of restricted  common stock
for  $37,500,  valued  at $.13  per  share,  fair  market  value  at the time of
issuance.

y. The Company and Citrus Land and Development Company entered into an agreement
for services rendered to the Company in the amount of $25,000. In February 2004,
the Company issued 355,000 shares of the Company common stock in connection with
these agreements.

z. The Company and Kenneth  Martin  entered into an agreement to compensate  him
for past services in the amount of $50,000, all of which was accrued at December
31, 2003.  In March 2004,  the Company  issued  200,000  shares of the Company's
common stock in full payment of this debt.

aa. On April 16, 2004, the Company and Burton Lasalle Corporation,  entered into
an agreement for services  rendered to the Company in the amount of $36,000.  In
April 2004 the Company  issued  200,000  shares of the Company  common  stock in
connection with this agreement.

bb. On April 16, 2004,  the Company and Basic  Investors,  Inc.  entered into an
agreement  for  services  rendered to the  Company in the amount of $72,000.  In
April 2004,  the Company  issued  400,000  shares of the Company common stock in
connection with this agreement.

cc. On March 4, 2004, the Company and Charter Capital  Resources,  Inc.  entered
into an agreement for services rendered to the Company in the amount of $14,000.
In May 2004,  the Company  issued  100,000 shares of the Company common stock in
connection with this agreement.

dd. On March 21, 2004 the  Company and Clark  Street  Capital,  entered  into an
agreement for services rendered to the Company in the amount of $72,000. In June
2004,  the  Company  issued  400,000  shares  of the  Company  common  stock  in
connection with this agreement.

ee. On May 5, 2004, the Company issued to three employees  185,000 shares of the
Company  common stock valued at $25,900 in  consideration  for their  respective
commitments as employees of the Company.

ff.  During  the second  quarter  of 2004 the  Company  sold  840,000  shares of
restricted  common  stock for  $105,000  valued at $.125 per share,  fair market
value at the time of issuance.


                                      -18-
<PAGE>

8.    COMMITMENTS AND CONTINGENCIES

a.    Executive Employment Agreement

      Effective March 11, 2003, the Company entered into an employment agreement
with Peter  Russo for three years with a renewal  option upon mutual  agreement.
The agreement compensates Mr. Russo $10,800 per month.  Additionally,  Mr. Russo
will receive an incentive  of 1.5% of adjusted  net profits  beginning  with the
year 2003 and each fiscal  year  thereafter  during the term of this  agreement,
payable in stock. This agreement and Mr. Russo's employment may be terminated by
the Company at its discretion at any time after the initial term,  provided that
the Mr.  Russo  be paid six  months  of his base  compensation  then in  effect.
Effective June 11, 2003, Mr. Russo was appointed  president and chief  executive
officer and in recognition of his new responsibilities agreed to compensation of
$15,000 per month effective July 1, 2003.

b.    License Agreements

(1) In April 2003,  the Company  entered into a License  Agreement (the "License
Agreement") with Joseph Friedman and Sons International,  Inc.  ("Friedman") for
the territory of the Former Soviet Union.  The License  Agreement was predicated
upon  technologies  that were assigned to Delta Mutual,  Inc. under an agreement
with the technology  owner. Due to actions taken against the technology owner by
its creditors  during the latter part of 2003, it lost its ability to assign the
technologies to the Company. Accordingly, the Company was unable to convey these
rights to Friedman.

      The Company  and  Friedman  executed an Addendum to the License  Agreement
(the  "Addendum")  in April 2003 that granted  Friedman  shares of the Company's
common stock and a seat on the Company's board of directors.  The Company issued
Friedman  288,368  shares of common  stock  representing  a value of  $40,000 in
consideration of Friedman executing and delivering of the license agreement.  In
November 2003,  Friedman made a claim for additional shares of stock, citing the
antidilution  language in the Addendum.  Friedman also required that his nominee
be appointed to the Board of Directors.

      In light of the events  that have  effected  the  License  Agreement,  the
Company  notified  Friedman  on March  30,  2004,  as  provided  in the  License
Agreement,  terminating the License Agreement and the Addendum.  The Company has
taken the position  that the  termination  of the License  Agreement  eliminates
Friedman's right to a board seat.

      The  Company has agreed to a  settlement  amount to be paid to Friedman in
settlement  of his claims  against the  Company,  and  expects to  conclude  the
settlement in the near future.

(2) The  Company  and  Delta  Envirotech  ("Licensee")  entered  into a  license
agreement permitting the licensee to utilize any and all technologies,  licenses
and  permits  acquired  by the  Company  to  develop  environmental  remediation
projects.  The license agreement  included the Middle East,  Africa, and the Far
East.  The  current  license  agreement  lapsed and a new license  agreement  is
pending.


                                      -19-
<PAGE>

c.    FINANCING AGREEMENT

      On July 8, 2003,  the Company  entered into an agreement with Rolan Jansen
and Ivano  Angelastri  ("J&A") to  introduce  and  arrange  equity debt or other
financing agreements with strategic partners, for the Company, or its affiliates
for a finders fee of 6.0% to Rolan  Jansen and 2.0% to Ivano  Angelastri  of the
gross proceeds of the equity financing.  For the six months ended June 30, 2004,
no financing was introduced to the Company in connection with this agreement.

9.    NEW FINANCIAL ACCOUNTING STANDARDS

      In June  2002,  the  FASB  issued  SFAS No.  146,  "Accounting  for  Costs
Associated with Exit or Disposal  Activities." This Statement requires recording
costs  associated  with exit or disposal  activities at their fair values when a
liability has been incurred.  Under previous  guidance,  certain exit costs were
accrued upon  management's  commitment to an exit plan. The Company adopted SFAS
No. 146 on January 1, 2003. The adoption of SFAS No. 146 did not have a material
impact on the Company's result of operations or financial position.

      In April 2003,  the FASB issued SFAS No. 149,  "Amendment of Statement No.
133 on Derivative Instruments and Hedging Activities." This statement amends and
clarifies  financial  accounting  and  reporting  for  derivative   instruments,
including  certain  derivative  instruments  embedded in other contracts and for
hedging  activities  under FASB  Statement No. 133,  "Accounting  for Derivative
Instruments and Hedging  Activities."  This Statement is effective for contracts
entered  into or modified  after June 30,  2003,  and for hedging  relationships
designated  after  June 30,  2003.  Adoption  of this  statement  did not have a
material impact on the Company's results of operations or financial position.

      In November  2002,  the FASB issued FASB  Interpretation  No. 45 (FIN 45),
Guarantor's  Accounting and Disclosure  Requirements  for Guarantees,  Including
Indirect  Guarantees  of  Indebtedness  of Others,  and  interpretation  of FASB
Statements No. 5, 57,and 107 and Rescission of FASB  Interpretation  No. 34. FIN
45  clarifies  the   requirements  of  FASB  Statement  No.  5,  Accounting  for
Contingencies,  relating to the  guarantor's  accounting for, and disclosure of,
the issuance of certain types of guarantees.  This interpretation clarifies that
a guarantor  is required to  recognize,  at the  inception  of certain  types of
guarantees,  a  liability  for the fair value of the  obligation  undertaken  in
issuing  the  guarantee.   The  initial   recognition  and  initial  measurement
provisions of this  Interpretation  are  applicable  on a  prospective  basis to
guarantees  issued or modified  after  December  31, 2002,  irrespective  of the
guarantor's fiscal year-end. The disclosure  requirements in this interpretation
were  effective for financial  statements  of interim or annual  periods  ending
after  December 15,  2002.  The Company  adopted FIN 45 on January 1, 2003.  The
adoption of FIN 45 did not have a material  impact on the  Company's  results of
operations or financial position.


                                      -20-
<PAGE>

      In January  2003,  the FASB issued FIN No. 46,  Consolidation  of Variable
Interest Entities.  In December 2003, the FASB issued FIN No. 46 (Revised) ("FIN
46-R") to address  certain FIN 46  implementation  issues.  This  interpretation
requires that the assets,  liabilities,  and results of activities of a Variable
Interest  Entity ("VIE") be  consolidated  into the financial  statements of the
enterprise  that has a  controlling  interest in the VIE. FIN 46R also  requires
additional  disclosures by primary  beneficiaries and other significant variable
interest holders. For entities acquired or created before February 1, 2003, this
interpretation  is  effective  no later  than the end of the  first  interim  or
reporting  period  ending after March 15, 2004,  except for those VIE's that are
considered to be special  purpose  entities,  for which the effective date is no
later than the end of the first interim or annual  reporting period ending after
December 15, 2003. For all entities that were acquired subsequent to January 31,
2003, this  interpretation is effective as of the first interim or annual period
ending after  December 31, 2003.  The adoption of FIN 46 did not have a material
impact on the Company's results of operations or financial position.

      In May  2003,  the FASB  issued  SFAS No.  150,  "Accounting  for  Certain
Financial Instruments with Characteristics of Both Liabilities and Equity." SFAS
No.  150  clarifies  the  accounting  for  certain  financial  instruments  with
characteristics   of  both  liabilities  and  equity  and  requires  that  those
instruments be classified as  liabilities  in statements of financial  position.
Previously,  many of those financial instruments were classified as equity. SFAS
No. 150 is effective for financial  instruments  entered into or modified  after
May 31, 2003,  and  otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003. The adoption of the provisions of SFAS No.
150 did not have a material impact on the Company's financial position.

      In  December  2003,  the FASB  issued  SFAS No. 132  (Revised)  ("SFAS No.
132-R"),   "Employer's   Disclosure  about  Pensions  and  Other  Postretirement
Benefits." SFAS No. 132-R retains  disclosure  requirements of the original SFAS
No. 132 and requires  additional  disclosures  relating to assets,  obligations,
cash flows,  and net periodic benefit cost for defined benefit pension plans and
defined  benefit post retirement  plans.  SFAS No. 132-R is effective for fiscal
years ending  after  December 15,  2003,  except that  certain  disclosures  are
effective  for  fiscal  years  ending  after  June  15,  2004.   Interim  period
disclosures are effective for interim periods beginning after December 15, 2003.


                                      -21-
<PAGE>

ITEM 6. 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 the 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.

GENERAL

We were  incorporated in the State of Delaware on November 17, 1999 and remain a
development  stage company that will require  additional  capital to execute our
planned business operations.

RESULTS OF OPERATIONS

During  the  fiscal  year  ended  December  31,  2003 we  incurred a net loss of
$1,249,509,  because we had no revenue to offset operating expenses.  During the
fiscal year ended  December 31, 2002 we incurred a net loss of $325,384 that was
primarily  attributable  to  bad  debts  in the  aggregate  amount  of  $96,625,
consulting  expenses  of  approximately  $71,000  and  professional  fees in the
approximate amount of $114,500.  From inception  (November 17, 1999) to December
31,  2003,  we had a net loss of  $1,789,400.  For the six months ended June 30,
2004, we incurred a net loss of $667,504.

The Independent Auditors' Report and Note 1 of the Notes to Financial Statements
accompanying  this report state that substantial doubt has been raised about our
ability to continue as a going concern.  Our present business  operations do not
generate  any revenue  with which to cover our  expenses.  We will have to raise
capital  through the placement of our securities in order to remain  viable.  We
are continuing to incur management and administrative  costs,  professional fees
and other expenses.  If we are unable to raise capital we will be unable to fund
our plan of  operations.  Because we will  continue to incur net losses,  we may
have to cease operations entirely. This factor, among others, raises substantial
doubt about our ability to continue as a going concern.

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.

2004 COMPARED TO 2003

The net loss increased from approximately $597,000 for the six months ended June
30, 2003 to  approximately  $668,000 for the six months ended June 30, 2004. The
items of significant  increase or decrease in the six months ended June 30, 2004
over the  comparable  period of the prior year were an  increase  in general and
administrative  expense  from  approximately  $564,000 in 2003 to  approximately
$610,000 for the six months ended June 30, 2004; a decrease in interest  expense
of approximately  $22,000 from the comperable prior year period; and a loss from
joint venture activities of approximately  $74,000 for the six months ended June
30, 2004.

The net loss  decreased from  approximately  $481,000 for the three months ended
June 30, 2003 to  approximately  $353,000  for the three  months  ended June 30,
2004.  The items of  significant  increase or decrease in the three months ended
June 30, 2004 over the  comparable  period of the prior year were an decrease in
general  and  administrative  expense  from  approximately  $449,000  in 2003 to
approximately  $327,000  for the three months ended June 30, 2004; a decrease in
interest expense from approximately  $32,000 in 2003 to approximately $3,000 for
the three months ended June 30, 2004;  and a loss from joint venture  activities
of approximately $39,000 for the three months ended June 30, 2004.


                                      -22-
<PAGE>

PLAN OF OPERATION

Since the Change in Control,  new Company  management  has  embarked  upon a new
mission and strategic direction,  by establishing joint venture subsidiaries and
a limited  partnership,  primarily to establish  business  operations focused on
providing  construction  and  environmental  technologies and services in Puerto
Rico, the Middle East, Africa and the Far East.

Puerto Rico

The Company  formed a majority  owned joint venture in Puerto Rico to manage the
construction and related activities required to build low income homes in Puerto
Rico under the Federal  Government's  Section 124 low income housing program. In
December  2003,  the Company  secured the  purchase  rights to 36 acres that are
designated Section 124 eligible.  Approximately 270 low-income homes are planned
for  construction  on this  property.  During  the second  quarter of 2004,  the
necessary  building permits were submitted for approval and a real estate agency
was hired to to sell the homes planned for construction.

Middle East, Africa and Far East

We intend to establish local  operating joint ventures in specific  countries in
the Middle East and the Far East primarily aimed at soil and water  reclamation.
The initial step of forming a strategic  alliance leading to a joint venture has
been established with a local  organization in Saudi Arabia, and discussions are
underway  in  Indonesia.  The  Company  intends  to provide  only  environmental
remediation  services  in  Africa  as these  projects  are  primarily  funded by
international financial institutions.

Central and Eastern Europe

The Company has made a strategic  decision to minimize its activities in Eastern
Europe  and to  maintain  a small  passive  investment  in the area  that can be
expanded in the future if current  circumstances change. While the potential for
significant   environmental   remediation  activity  remains,  local  government
priorities  and hard  currency  shortages  relegate  these  activities  to a low
status.

We are currently  dependent on equity  investments 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.  Due to the fact that we have limited  operations  at this
time,  it  is   anticipated   that  our  cash   requirements   for  general  and
administrative  expenses  will be limited;  however,  we  estimate  that we will
require approximately  $400,000 in working capital for Puerto Rico, and $517,000
for our evironmental  activities in the Middle East and Indonesia. We anticipate
that  we will  be  required  to  raise  capital  in the  approximate  amount  of
$1,800,000  in the  next 12  months  in order to  continue  to fund our  limited
operations and to finance our planned business operations.

LIQUIDITY

At December 31, 2003, we had a working capital deficit of $623,423,  and at June
30,  2004 we had a working  deficit  of  $820,624,  as  compared  with a working
capital  deficit of  $296,218  at June 30,  2003.  The  increase  in our working
capital  deficit  is a result of the net loss  incurred  during  the year  ended
December 31, 2003 and the six month period ended June 30, 2004. Since we have no
source of revenue,  our working  capital deficit will continue to increase as we
incur additional operating expenses.  Presently,  we have no external sources of
cash and we are dependent  upon and private  placements of our stock or debt for
funding.

In 2003,  we raised  $162,500  of equity  capital,  through  the sale of 550,000
shares of common stock. In addition,  we borrowed $100,000 from our Former Chief
Executive  Officer in March 2003 to make a payment of an  identical  amount to a
consultant.  On June 30, 2003,  the Former  Chief  Executive  Officer  agreed to
release the Company from the note and assume the  responsibility  for recovering
the amount paid to the Consultant.

In the six months ended June 30, 2004, we raised $142,500 of equity capital from
private  investors  through the sale of common  stock and  $363,900  through the
issuance of convertible notes to private investors.

ASSETS

At December 31, 2003,  we had total assets of $84,702,  and at June 30, 2004, we
had total  assets of  $391,889,  as compared to total assets of $344,776 at June
30, 2003.  The increase in assets as of June 30, 2004, was due to an increase in
cash, an increase in fixed assets, an investment in a subsidiary and capitalized
construction costs.


                                      -23-
<PAGE>

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 effect 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.

Other Matters

Accounting Pronouncements

In August 2001, the FASB issued SFAS No. 143  "Accounting  for Asset  Retirement
Obligations".  SFAS No. 143  addresses  financial  accounting  and reporting for
obligations  and costs  associated  with the  retirement of tangible  long-lived
assets.  The Company  adopted SFAS 143 on January 1, 2003.  The adoption of SFAS
No.143 did not have a material impact on the Company's  results of operations or
financial position.

In April 2002, the FASB issued SFAS No. 145  "Rescission of FASB  Statements No.
4, 44, and 64,  Amendment of FASB Statement No. 13, and Technical  Corrections".
This  statement  eliminates  the  automatic  classification  of  gain or loss on
extinguishment of debt as an extraordinary item of income and requires that such
gain or loss be evaluated for extraordinary classification under the criteria of
Accounting  Principles  Board No. 30  "Reporting  Results of  Operations".  This
statement   also   requires   sales-leaseback   accounting   for  certain  lease
modifications  that have  economic  effects that are similar to  sales-leaseback
transactions,   and  makes  various  other  technical  corrections  to  existing
pronouncements.  This  statement  will be effective for the Company for the year
ending December 31, 2003.  Management believes that adopting this statement will
not have a material  effect on the Company's  results of operations or financial
position.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal  Activities."  This  Statement  requires  recording  costs
associated  with  exit or  disposal  activities  at  their  fair  values  when a
liability has been incurred.  Under previous  guidance,  certain exit costs were
accrued upon  management's  commitment to an exit plan. The Company adopted SFAS
No. 146 on January 1, 2003. The adoption of SFAS No. 146 did not have a material
impact on the Company's result of operations or financial position.

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation-Transition and Disclosure, an amendment of FASB Statement No. 123".
SFAS No. 148 provides  alternative  methods of transition for a voluntary change
to  the  fair  value  based  method  of  accounting  for  stock-based   employee
compensation.  It also requires  disclosure in both annual and interim financial
statements about the method of accounting for stock-based employee  compensation
and the effect of the method used on reported results. SFAS No. 148 is effective
for annual and interim  periods  beginning  after December 15, 2002. The Company
will  continue  to  account  for  stock-based  employee  compensation  under the
recognition  and  measurement  principle  of APB  Opinion  No.  25  and  related
interpretations.  The Company  complied with the  additional  annual and interim
disclosure requirements effective December 31, 2002 and September 30, 2003.

In April 2003, the FASB issued SFAS No. 149,  "Amendment of Statement No. 133 on
Derivative  Instruments  and  Hedging  Activities."  This  statement  amends and
clarifies  financial  accounting  and  reporting  for  derivative   instruments,
including  certain  derivative  instruments  embedded in other contracts and for
hedging  activities  under FASB  Statement No. 133,  "Accounting  for Derivative
Instruments and Hedging  Activities."  This Statement is effective for contracts
entered  into or modified  after June 30,  2002,  and for hedging  relationships
designated after June 30, 2003. Management believes that adopting this statement
will not have a  material  effect on the  Company's  results  of  operations  or
financial position.

In  November  2002,  the  FASB  issued  FASB  Interpretation  No.  45 (FIN  45),
Guarantor's  Accounting and Disclosure  Requirements  for Guarantees,  Including
Indirect  Guarantees  of  Indebtedness  of Others,  and  interpretation  of FASB
Statements No. 5, 57,and 107 and Rescission of FASB  Interpretation  No. 34. FIN
45  clarifies  the   requirements  of  FASB  Statement  No.  5,  Accounting  for
Contingencies,  relating to the  guarantor's  accounting for, and disclosure of,
the issuance of certain types of guarantees.  This interpretation clarifies that
a guarantor  is required to  recognize,  at the  inception  of certain  types of
guarantees,  a  liability  for the fair value of the  obligation  undertaken  in
issuing  the  guarantee.   The  initial   recognition  and  initial  measurement
provisions of this  Interpretation  are  applicable  on a  prospective  basis to
guarantees  issued or modified  after  December  31, 2002,  irrespective  of the
guarantor's fiscal year-end. The disclosure  requirements in this interpretation
are effective for financial statements of interim or annual periods ending after
December 15, 2002.  The Company  adopted FIN 45 on January 1, 2003. The adoption
of FIN 45 did not have a material impact on the Company's  results of operations
or financial position.


                                      -24-
<PAGE>

In January 2003, the Financial Accounting Standards Board issued  Interpretation
No.  46,   "Consolidation  of  Variable  Interest   Entities,"  which  addresses
consolidation by business enterprises of variable interest entities. In general,
a variable  interest entity is a corporation,  partnership,  trust, or any other
legal structure used for business  purposes that either (a) does not have equity
investors  with voting  rights or (b) has equity  investors  that do not provide
sufficient  financial  resources  for the entity to support  its  activities.  A
variable  interest  entity  often holds  financial  assets,  including  loans or
receivables,  real estate or other property.  A variable  interest entity may be
essentially  passive  or it may  engage in  research  and  development  or other
activities on behalf of another company.  The objective of Interpretation No. 46
is not to  restrict  the  use  of  variable  interest  entities  but to  improve
financial reporting by companies involved with variable interest entities. Until
now,  a company  generally  has  included  another  entity  in its  consolidated
financial  statements only if it controlled the entity through voting interests.
Interpretation No. 46 changes that by requiring a variable interest entity to be
consolidated  by a company if that  company is subject to a majority of the risk
of loss from the variable interest entity's  activities or entitled to receive a
majority  of  the  entity's   residual   returns  or  both.  The   consolidation
requirements of  Interpretation  No. 46 apply  immediately to variable  interest
entities created after January 31, 2003. The consolidation requirements apply to
older entities in the first fiscal year or interim period  beginning  after June
15,  2003.  Certain  of the  disclosure  requirements  apply  in  all  financial
statements  issued  after  January 31,  2003,  regardless  of when the  variable
interest entity was established. The Company does not have any variable interest
entities,  and, accordingly,  adoption is not expected to have a material effect
on the Company's results or operations or financial position.

In May 2003, the FASB issued SFAS No. 150 "Accounting for Financial  Instruments
with the  Characteristics  of Both  Liabilities  and  Equities".  SFAS  No.  150
establishes  standards  regarding the manner in which an issuer  classifies  and
measures certain types of financial  instruments having  characteristics of both
liabilities and equity.  Pursuant to SFAS No. 150, such  freestanding  financial
instruments (i.e. those entered into separately from an entity's other financial
instruments or equity transactions or that are legally detachable and separately
exercisable)  must be classified as liabilities  or, in some cases,  assets.  In
addition,   SFAS  No.  150  requires  that  financial   instruments   containing
obligations to repurchase the issuing  entity's equity shares and, under certain
circumstances,  obligations  that are settled by delivery of the issuer's shares
be  classified  as  liabilities.   The  Statement  is  effective  for  financial
instruments  entered  into  or  modified  after  May  31,  2003  and  for  other
instruments  at the beginning of the first  interim  period after June 15, 2003.
Management  believes  adopting this statement will not have a material effect on
the statement of operations or financial position.

Item 3. 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 4. Controls and Procedures

(a)  Disclosure  controls and  procedures.  As of the end of the Company's  most
recently completed fiscal quarter (the registrant's 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


                                      -25-
<PAGE>

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.

(b) 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 1. LEGAL PROCEEDINGS

There are no legal  proceedings  against the  Company,  however,  the two claims
discussed below are currently under negotiation.

Joseph Friedman and Sons International, Inc.

In April 2003,  the  Company  entered  into a License  Agreement  (the  "License
Agreement") with Joseph Friedman and Sons International,  Inc.  ("Friedman") for
territory of the Former Soviet Union. The License  Agreement was predicated upon
technologies  that were assigned to Delta Mutual,  Inc.  under an agreement with
the technology  owner.  Due to actions taken against the technology owner by its
creditors  during the  latter  part of 2003,  it lost its  ability to assign the
technologies  to the Company and its agreement with the Company was  terminated.
Accordingly, the Company was unable to convey these rights to Friedman.

The Company and  Friedman  executed  an Addendum to the License  Agreement  (the
"Addendum") in April 2003 that granted  Friedman shares of the Company's  common
stock  and a seat on the  Company's  board  of  directors.  The  Company  issued
Friedman 288,368 shares of common stock in  consideration of Friedman  executing
the License  Agreement.  In October 2003,  Friedman made a claim for  additional
shares of stock, citing the antidilution language in the Addendum, and requested
that its nominee be appointed to the Company's board of directors.

In light of the events that effected the License Agreement, the Company notified
Friedman on March 30, 2004 that it considered the License  Agreement  terminated
and that the termination of the License Agreement eliminated Friedman's right to
a seat on the Company's board of directors.

We have agreed to a settlement  amount to be paid to Friedman in  settlement  of
his claims against the Company,  and are expecting to conclude the settlement in
the near future.

B. Michael Pisani

On January  7,  2003,  the  Company  borrowed  $15,000  from B.  Michael  Pisani
("Pisani"),  a  stockholder  of the Company,  which was payable with interest on
January 27, 2003.  The  promissory  note  provided for the issuance of shares of
common  stock to Pisani for each month that  amounts due and owing were not paid
by the Company.  The Company did not pay the outstanding balance on the maturity
date. In April 2003, the Company repaid $5,000 of the outstanding balance.

In May 2003,  the  promissory  note was amended to eliminate the  requirement of
additional  shares and  subsequently  a dispute  arose about the validity of the
amendment.

On March 24, 2004,  the Company  repaid the principal and interest due under the
terms of the amended note. Pisani,  through counsel,  informed the Company that,
by  accepting  repayment,  he does not  prejudice  his  position  regarding  the
validity of the original note.

The Company is attempting to resolve this dispute. If Pisani prevails in a legal
action against the Company,  he may be entitled to, in addition to the principal
amount and  interest  that he has received  from the  Company,  shares of common
stock as additional interest.


                                      -26-
<PAGE>

ITEM 2. Changes in  Securities,  Use of Proceeds and Issuer  Purchases of Equity
Securities

(c) Sales of Unregistered Securities

<TABLE>
<CAPTION>
                                                                                               Total Offering
                                                                                 Principal   Price/Underwriting
     Date                Title and Amount                       Purchaser       Underwriter       Discounts
     ----                ----------------                       ---------       -----------       ---------
<S>                 <C>                                      <C>                <C>          <C>

April 5, 2004       50, 000 shares of common stock           Private Investor         NA            $.15/NA

April 14, 2004      200,000 shares of common stock           Private Investor         NA            $.125/NA

April 16, 2004      400,000 shares of common stock              Consultant            NA            $.18/NA

April 16, 2004      200,000 shares of common stock              Consultant            NA            $.18/NA

May 5, 2004         100,000 shares of common stock               Employee             NA            $.14/NA

May 5, 2004         60,000 shares of common stock                Employee             NA            $.14/NA

May 5, 2004         25,000 shares of common stock                Employee             NA            $.14/NA

May 5, 2004         35,000 shares of common stock            Private Investor         NA            $.125/NA

May 5, 2004         35,000 shares of common stock            Private Investor         NA            $.125/NA

May 6, 2004         200,00 shares of common stock            Private Investor         NA            $.125/NA

May 6, 2004         100,000 shares of common stock              Consultant            NA            $.125/NA

May 11, 2004        100,000 shares of common stock           Private Investor         NA            $.125/NA

May 12, 2004        Term Sheet for convertible note          Private Investor         NA            $.125/NA
                    due May 12, 2006 in the principal
                    amount of $193,740, convertible into
                    1,549,920 shares of common stock

May 12, 2004        Term Sheet for convertible note          Private Investor         NA            $.125/NA
                    due May 12, 2006 in the principal
                    amount of $129,160, convertible into
                    1,033,280 shares of common stock

June 2, 2004        60,000 shares of common stock            Private Investor         NA            $.125/NA

June 8, 2004        50,000 shares of common stock            Private Investor         NA            $.125/NA

June 8, 2004        50,000 shares of common stock            Private Investor         NA            $.125/NA

June 10,2004        50,000 shares of common stock            Private Investor         NA            $.125/NA

June 10,2004        30,000 shares of common stock            Private Investor         NA            $.125/NA

June 10,2004        15,000 shares of common stock            Private Investor         NA            $.125/NA

June 10,2004        15,000 shares of common stock            Private Investor         NA            $.125/NA

June 14, 2004       400,000 shares of common stock           Private Investor         NA            $.18/NA

July 1, 2004        Term Sheet for convertible note          Private Investor         NA            $.05/NA
                    due December 31,2006 in the principal
                    amount of $157,000, convertible into
                    3,140,000 shares of common stock
</TABLE>

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.


                                      -27-
<PAGE>

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

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable

ITEM 6. Exhibits and Reports on Form 8-K

(a) Exhibits:

10.21    Agreement, dated April 5, 2004, between Trans  Indies Realty Investment
         Corporation and Delta Developers Corp.

10.22    Term Sheet,  dated May 12, 2004, among Delta Mutual,  Inc., Neil Berman
         and Ivano Angelastri.

10.23    Term Sheet,  dated July 1, 2004,  between Delta  Mutual,  Inc. and Neil
         Berman.

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, 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.


(b)   Reports on Form 8-K

      None.

                                   SIGNATURES

In accordance  with the  requirements  of the Exchange Act, the  registrant  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 12, 2004


                                      -28-
<PAGE>

                                  EXHIBIT INDEX

10.21    Agreement, dated April 5, 2004, between Trans Indies  Realty Investment
         Corporation and Delta Developers Corp.

10.22    Term Sheet,  dated May 12, 2004, among Delta Mutual,  Inc., Neil Berman
         and Ivano Angelastri.

10.23    Term Sheet,  dated July 1, 2004,  between Delta  Mutual,  Inc. and Neil
         Berman.

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, 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.