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 March 31, 2008




OR




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


ACT
      OF
      1934




For
      the
      transition period from ____________ to _________________




Commission
      File Number 000-30563




DELTA
      MUTUAL, INC.




(Exact
      name of registrant as specified in its charter)




DELAWARE
            14-1818394(State
                or other jurisdiction of
            (I.R.S.
                Employerincorporation
                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 o




Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a smaller reporting company. (Check One):





Large
      accelerated filer o    Accelerated
      filer o





Non-accelerated
      filer o Smaller
      reporting company x


(Do
      not
      check if a smaller reporting company)





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). o Yes   x No




The
      number of shares outstanding the issuer's common stock, par value $.0001 per
      share, was 221,849,158 as of June 30, 2008.










DELTA
      MUTUAL, INC.




INDEX




PagePart
                I. Financial Information
            3Item
                1. Financial Statements
            3Consolidated
                Balance Sheet as of March 31, 2008 (unaudited) and as of December
                31,
                2007
            3Consolidated
                Statements of Operations for the Three Months Ended March 31, 2008
                and
                2007 (unaudited)
            4Consolidated
                Statement of Stockholders' Equity (unaudited)
            5Consolidated
                Statements of Cash Flows for the Three Months Ended March 31, 2008
                and
                2007 (unaudited)
            6-7Notes
                to Unaudited Consolidated Financial Statements
            8-23Item
                2. Management's Discussion and Analysis of Financial Condition and
                Results
                of Operations
            24Item
                3. Quantitative and Qualitative Disclosures About Market
                Risk
            27Item
                4T.Controls and Procedures.
            27Part
                II. Other Information
            27Item
                1A. Risk Factors.
            28Item
                5. Other Information.
            29Item
                6. Exhibits.
            30Signatures
            31


Page
          2







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, 2007.




The
      results of operations for the three months ended March 31, 2008 and
      2007
      are not necessarily indicative of the results for the entire fiscal year
      or
      for any other period.










**DELTA
      MUTUAL, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      BALANCE SHEET**





March 31,
            
            December 31,2008
            
            2007(Unaudited)ASSETSCurrent
                Assets:Cash
            
            $
            12,697
            
            $
            57,633Investments
            
            
            2,409,596
            
            
            4,709,020Prepaid
                expenses
            
            
            1,914
            
            
            1,914Total
                Current Assets
            
            
            2,424,207
            
            
            4,768,567Property
                and equipment - net
            
            
            356,915
            
            
            368,123Intangible
                asset
            
            
            124,529
            
            
            126,317Investments
                in oil and gas concessions
            
            
            2,300,000
            
            
            2,300,000Other
                assets
            
            
            650
            
            
            650TOTAL
                ASSETS
            
            $
            5,206,301
            
            $
            7,563,657LIABILITIES
                AND STOCKHOLDERS' EQUITYCurrent
                Liabilities:Accounts
                payable
            
            $
            163,184
            
            $
            412,922Accrued
                expenses
            
            
            1,283,682
            
            
            1,225,674Convertible
                debt
            
            
            397,340
            
            
            397,340Notes
                payable
            
            
            2,601,655
            
            
            2,540,655Total
                Current Liabilities
            
            
            4,445,861
            
            
            4,576,591Minority
                interest in consolidated subsidiaries
            
            
            225,576
            
            
            225,797Stockholders'
                Equity:Common
                stock $0.0001 par value - authorized 250,000,000 shares: 218,882,953
                and
                208,882,953 outstanding, respectively
            
            
            21,888
            
            
            20,888Additional
                paid-in-capital
            
            
            12,349,511
            
            
            11,953,766Accumulated
                deficit
            
            
            (11,836,535
            )
            
            (9,213,385
            )Total
                Stockholders' Equity
            
            
            534,864
            
            
            2,761,269TOTAL
                  LIABILITIES ANDSTOCKHOLDERS'
                  EQUITY
            
            $
            5,206,301
            
            $
            7,563,657





See
      Notes
      to Unaudited Consolidated Financial Statements





Page
            3





**DELTA
      MUTUAL, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**(UNAUDITED)**





Three Months Ended March 31,2008
            
            2007Investment
                results
            
            $
            (2,060,953
            )
            $
            (483,523
            )General
                and administrative expenses
            
            
            601,678
            
            
            540,323Valuation
                results
            
            
            22
            
            
            -601,700
            
            
            540,323Loss
                from operations
            
            
            (2,662,653
            )
            
            (1,023,846
            )Interest
                expense
            
            
            32,209
            
            
            (6,983
            )Loss
                before minority interest
            
            
            (2,630,444
            )
            
            (1,030,829
            )Minority
                interest share of income (loss) of consolidated
                subsidiaries
            
            
            7,295
            
            
            (37,053
            )Loss
                before benefit from income taxes
            
            
            (2,623,149
            )
            
            (1,067,882
            )Benefit
                from income taxes
            
            
            -
            
            
            -Net
                loss
            
            $
            (2,623,149
            )
            $
            (1,067,882
            )Loss
                per common share-
              basic
                and diluted
            
            $
            (0.01
            )
            $
            (0.01
            )Weighted
                average number of common shares outstanding-
              basic
                and diluted
            
            
            211,994,064
            
            
            192,185,922





See
      Notes
      to Unaudited Consolidated Financial Statements





Page
            4


**DELTA
        MUTUAL, INC. AND SUBSIDIARIES**
 **CONSOLIDATED
        STATEMENT OF STOCKHOLDERS' EQUITY**
 
 **(Unaudited)**
 Number
                    of
                
                
                
                
                
                
                
                
                
                DeferredCommon
                
                Common
                
                Paid
                    in
                
                Accumulated
                
                Subscription
                
                StockShares
                
                Stock
                
                Capital
                
                Deficit
                
                Receivable
                
                Purchase
                
                TotalBalance,
                    January 1, 2007
                
                
                192,161,246
                
                $
                19,216
                
                $
                10,321,138
                
                $
                (5,883,087
                )
                $
                (10,000
                )
                $
                266,000
                
                $
                4,713,267Issuance
                    of common stock for interest expense(valued
                    at $0.06 - $0.125 per share)
                
                
                135,040
                
                
                13
                
                
                15,307
                
                
                -
                
                
                -
                
                
                -
                
                
                15,320Issuance
                    of common stock for convertible debt(valued
                    at $0.05 - $0.125 per share)
                
                
                16,586,667
                
                
                1,659
                
                
                830,341
                
                
                -
                
                
                -
                
                
                -
                
                
                832,000Conversion
                    to convertible notes
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (266,000
                )
                
                (266,000
                )Receipt
                    of subscribed stock
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                10,000
                
                
                
                
                
                10,000Stock
                    based compensation expense
                
                
                -
                
                
                -
                
                
                786,980
                
                
                -
                
                
                -
                
                
                -
                
                
                786,980Net
                    (loss)
                
                
                -
                
                
                -
                
                
                -
                
                
                (3,330,298
                )
                
                -
                
                
                -
                
                
                (3,330,298
                )Balance,
                    December 31, 2007
                
                
                208,882,953
                
                
                20,888
                
                
                11,953,766
                
                
                (9,213,385
                )
                
                -
                
                
                -
                
                
                2,761,269Issuance
                    of common stock for services(valued
                    at $0.02 per share)
                
                
                10,000,000
                
                
                1,000
                
                
                199,000
                
                
                -
                
                
                -
                
                
                -
                
                
                200,000Stock
                    based compensation expense
                
                
                -
                
                
                -
                
                
                196,745
                
                
                -
                
                
                -
                
                
                -
                
                
                196,745Net
                    (loss)
                
                
                -
                
                
                -
                
                
                -
                
                
                (2,623,149
                )
                
                -
                
                
                -
                
                
                (2,623,149
                )Balance,
                    March 31, 2008
                
                
                218,882,953
                
                $
                21,888
                
                $
                12,349,511
                
                $
                (11,836,534
                )
                
                -
                
                
                -
                
                $
                534,864
 See
            Notes
            to Unaudited Consolidated Financial Statements


Page
              5


**DELTA
      MUTUAL, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**(UNAUDITED)**





Three
                Months Ended March 31,2008
            
            2007Cash
                flows from operating activities:Net
                loss
            
            $
            (2,623,149
            )
            $
            (1,067,882
            )Adjustments
                to reconcile net loss to net cash used in operating
                activities:Depreciation
                and amortization
            
            
            12,996
            
            
            13,121Non-cash
                compensation
            
            
            200,000
            
            
            13,880Compensatory
                element of option issuance
            
            
            196,745
            
            
            196,745Minority
                interest in income (losses) of consolidated subsidiaries
            
            
            (7,295
            )
            
            37,053Changes
                in operating assets and liabilities
            
            
            (191,730
            )
            
            107,031Net
                cash used in operating activities
            
            
            (2,412,433
            )
            
            (700,052
            )Cash
                flows from investing activities:Deposit
                on land
            
            
            -
            
            
            (25,000
            )Decrease
                in investments
            
            
            2,299,424
            
            
            480,299Refund
                of land deposit
            
            
            -
            
            
            35,500Net
                cash provided by investing activities
            
            
            2,299,424
            
            
            490,799Cash
                flows from financing activities:Proceeds
                from loans
            
            
            121,000
            
            
            -Proceeds
                from convertible debt financing
            
            
            -
            
            
            17,000Repayment
                of loan
            
            
            (60,000
            )
            
            -Payments
                to minority interests
            
            
            -
            
            
            (5,000
            )Proceeds
                from minority interest
            
            
            7,073
            
            
            20,880Net
                cash provided by financing activities
            
            
            68,073
            
            
            32,880Net
                decrease in cash
            
            
            (44,936
            )
            
            (176,373
            )Cash
                - Beginning of period
            
            
            57,633
            
            
            211,147Cash
                - End of period
            
            $
            12,697
            
            $
            34,774





See
      Notes
      to Unaudited Consolidated Financial Statements




Page
              6


**DELTA
      MUTUAL, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


(Continued)


**(UNAUDITED)**





Three
                Months Ended March 31,2008
            
            2007Supplementary
                information:Cash
                paid during year for:Interest
            
            $
            -
            
            $
            -Income
                taxes
            
            $
            -
            
            $
            -Changes
                in operating assets and liabilities consists of:Decrease
                in prepaid expenses
            
            
            -
            
            
            47,250(Increase)
                decrease in accrued expenses
            
            
            (191,730
            )
            
            59,781$
            (191,730
            )
            $
            107,031Non-cash
                financing activities:Issuance
                of convertible notes for deferred stock purchase
            
            $
            -
            
            $
            283,000Issuance
                of common stock in lieu of payment of accrued expenses
            
            $
            -
            
            $
            13,880Issuance
                of common stock for services
            
            $
            200,000
            
            $
            -





See
      Notes
      to Unaudited Consolidated Financial Statements





Page
            7




DELTA
        MUTUAL, INC. AND SUBSIDIARIES
 NOTES
        TO
        UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 For
        the
        Three Months Ended March 31, 2008 and 2007
 
 1.
        DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
        POLICIES
 
 Organization
 
 Delta
        Mutual, Inc. and subsidiaries (“Delta” or the “Company”) was incorporated in
        Delaware on November 17, 1999. Since 2003, when the current management joined
        the Company, its principal business activities have focused on providing
        environmental and construction technologies and services to certain geographic
        reporting segments in the Far East, Middle East and the United
        States.
 
 On
        March
        4, 2008, the Company entered into a Membership Interest Purchase Agreement
        (the
“Agreement”) with Egani, Inc., an Arizona corporation (“Egani”). Pursuant to the
        Agreement, the Company acquired from Egani 100% of the issued and outstanding
        membership interests held by Egani in Altony S.A., an Uruguay Sociedad Anonima
        (“Altony”), which owns 100% of the issued and outstanding membership interests
        in South American Hedge Fund LLC, a Delaware limited liability company (“SAHF”).
        At the closing of the Agreement, the Company issued 130,000,000 shares of
        its
        common stock to Egani, for the purchase of all of the outstanding membership
        interests in Altony which constituted, following such issuance, a majority
        of
        the outstanding shares of the Company’s common stock.
 
 Immediately
        following the closing of the Agreement, Altony became a wholly owned subsidiary
        of the Company. For accounting purposes only, the transaction was treated
        as a
        recapitalization of the Company with Altony as the acquirer. The financial
        statements prior to March 4, 2008 are those of Altony and reflect the assets
        and
        liabilities of Altony at historical carrying amounts. The financial statements
        show a retroactive restatement of Altony’s historical stockholders’ equity to
        reflect the equivalent number of shares issued to the subsidiary.
 
 The
        principal business activity of Altony is the ownership and management of
        its
        SAHF subsidiary. SAHF has initially focused on oil and gas investments in
        Argentina and intends to continue its focus on the energy sector, including
        the
        development and supply of energy and alternate energy sources in Latin America
        and the United States.
 
 In
        August
        2007, SAHF signed a purchase option for a partial interest in three oil and
        gas
        concessions in Argentina. SAHF is in the process of obtaining the necessary
        government and environmental permits to operate these concessions.
 
 The
        Company intends to continue its environmental and construction technology
        and
        service activities. Its environmental activities are conducted by its joint
        venture subsidiary Delta-Envirotech, Inc. (“Envirotech”), headquartered in
        Virginia. The construction technology activities are conducted by the Company’s
        wholly owned subsidiary Delta Technologies, Inc. (“Technologies”) that holds
        intellectual property rights and has filed a patent for a new insulating
        concrete wall forming (ICF) system now known as *Delta
        Wall* .
  Page
            8
  BASIS
        OF
        PRESENTATION
 
 The
        consolidated balance sheet as of March 31, 2008, and the consolidated statements
        of operations and cash flows for the periods presented herein have been prepared
        by the Company and are unaudited. In the opinion of management, all adjustments
        (consisting solely of normal recurring adjustments) necessary to present
        fairly,
        the financial position, results of operations and cash flows for all periods
        presented have been made. The information for the consolidated balance sheet
        as
        of December 31, 2007 was derived from audited financial statements.
 
 The
        consolidated financial statements for the period ended March 31, 2008 have
        been
        prepared on a going concern basis which contemplates the realization of assets
        and settlement of liabilities and commitments in the normal course of business.
        Management recognizes that the Company's continued existence is dependent
        upon
        its ability to obtain needed working capital through additional equity and/or
        debt financing and revenue to cover expenses as the Company continues to
        incur
        losses.
 
 The
        Company's business is subject to most of the risks inherent in the establishment
        of a new business enterprise. The likelihood of success of the Company must
        be
        considered in light of the expenses, difficulties, delays and unanticipated
        challenges encountered in connection with the formation of a new business,
        raising operating and development capital, and the marketing of a new product.
        There is no assurance the Company will ultimately achieve a profitable level
        of
        operations.
 
 The
        Company presently does not have sufficient liquid assets to finance its
        anticipated funding needs and obligations. The Company's continued existence
        is
        dependent upon its ability to obtain needed working capital through additional
        equity and/or debt financing and achieve a level of sales adequate to support
        its cost structure. Management is actively seeking additional capital to
        ensure
        the continuation of its current activities and complete its proposed activities.
        However, there is no assurance that additional capital will be obtained or
        that
        the Company’s subsidiaries will be profitable. These uncertainties raise
        substantial doubt about the ability of the Company to continue as a going
        concern. The accompanying financial statements do not include any adjustments
        that might result from the outcome of these uncertainties should the Company
        be
        unable to continue as a going concern.
 
 SIGNIFICANT
        ACCOUNTING POLICIES
 
 PRINCIPLES
        OF CONSOLIDATION
 
 The
        Company's financial statements include the accounts of all majority-owned
        subsidiaries where its ownership is more than 50 percent of common stock.
        The
        consolidated financial statements also include the accounts of any Variable
        Interest Entities ("VIEs") where the Company is deemed to be the primary
        beneficiary, regardless of its ownership percentage. All significant
        intercompany balances and transactions with consolidated subsidiaries are
        eliminated in the consolidated financial statements. Where the Company's
        ownership interest is less than 100 percent, the minority ownership interests
        are reported in the consolidated balance sheet as a liability. The minority
        ownership interest of the Company's earnings or loss, net of tax, is classified
        as "Minority interest share of earnings (loss) of consolidated subsidiaries"
        in
        the consolidated statements of operations.
  Page
            9
  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,
        stock
        options and common stock purchase warrants. As of March 31, 2008 and 2007,
        there
        were 4,421,920 and 9,476,587 potential common shares related to convertible
        debt, respectively, and 7,978,000 and 6,998,000 potential common shares related
        to stock options, respectively.
 
 REVENUE
        RECOGNITION
 
 The
        Company recognizes revenue from the results of its investment portfolio as
        the
        difference between proceeds from the sale of securities and their acquisition
        cost, less commissions paid to the firm that conducts the securities
        transactions.
 
 EVALUATION
        OF LONG-LIVED ASSETS
 
 The
        Company reviews property and equipment and finite-lived intangible assets
        for
        impairment whenever events or changes in circumstances indicate the carrying
        value may not be recoverable in accordance with guidance in Statement of
        Financial Accounting Standards (SFAS) No. 144 "Accounting for the Impairment
        or
        Disposal of Long-Lived Assets." If the carrying value of the long-lived asset
        exceeds the 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.
  Page
            10
  STOCK-BASED
        COMPENSATION
 
 The
        Company has a stock-based compensation plan under which stock options are
        granted to employees. Effective January 1, 2006, the Company accounts for
        stock
        based compensation under Statement of Financial Accounting Standards ("SFAS")
        No. 123(R), "Share-Based Payment." The Company adopted SFAS 123(R) using
        the
        modified prospective method. Under modified prospective application, this
        SFAS
        applies to new awards and to awards for which the requisite service has not
        been
        rendered that are outstanding as of the required effective date shall be
        recognized as the requisite service is rendered on or after the required
        effective date. The compensation cost for the portion of awards shall be
        based
        on the grant-date fair value of those awards as calculated for either
        recognition or pro forma disclosures under SFAS 123. Changes to the grant-date
        fair value of equity awards granted before the required effective date of
        this
        Statement are precluded. The compensation cost for those earlier awards shall
        be
        attributed to periods beginning on or after the required effective date of
        this
        SFAS using the attribution method that was used under SFAS 123, except that
        the
        method of recognizing forfeitures only as they occur shall not be continued.
 
 INCOME
        TAXES
 
 The
        Company accounts for income taxes using an asset and liability approach under
        which deferred taxes are recognized by applying enacted tax rates applicable
        to
        future years to the differences between financial statement carrying amounts
        and
        the tax basis of reported assets and liabilities. The principal item giving
        rise
        to deferred taxes are future tax benefits of certain net operating loss
        carryforwards.
 
 FOREIGN
        CURRENCY TRANSLATION
 
 The
        functional currency for some foreign operations is the local currency. Assets
        and liabilities of foreign operations are translated at balance sheet date
        rates
        of exchange and income, expense and cash flow items are translated at the
        average exchange rate for the period. Translation adjustments in future periods
        will be recorded in Cumulative Other Comprehensive Income. The translation
        gains
        or losses were not material for the three months ended March 31, 2008 and
        2007.
 
 INTANGIBLES
 
 Effective
        January 1, 2002, the Company adopted SFAS No. 142, "Goodwill and Other
        Intangible Assets." SFAS No. 142 specifies the financial accounting and
        reporting for acquired goodwill and other intangible assets. Goodwill and
        intangible assets deemed to have indefinite useful lives are not amortized
        but
        are subject to, at a minimum, an annual impairment test. If the carrying
        value
        of goodwill or intangible assets exceeds its fair market value, an impairment
        loss would be recorded.
 
 FAIR
        VALUE OF FINANCIAL INSTRUMENTS
 
 For
        financial instruments including cash, investments, accounts payable, accrued
        expenses, notes payable and convertible debt, it was assumed that the carrying
        amount approximated fair value because of the short maturities of such
        instruments.
 
 Page
            11
 
 NEW
        FINANCIAL ACCOUNTING STANDARDS
 
 In
        February 2007, the FASB issued SFAS No. 159 ("SFAS 159") "The Fair Value
        Option
        for Financial Assets and Financial Liabilities," providing companies with
        an
        option to report selected financial assets and liabilities at fair value.
        The
        Standard's objective is to reduce both complexity in accounting for financial
        instruments and the volatility in earnings caused by measuring related assets
        and liabilities differently. It also requires entities to display the fair
        value
        of those assets and liabilities for which the Company has chosen to use fair
        value on the face of the balance sheet. The adoption of SFAS 159 on January
        1,
        2008 did not impact the Company’s consolidated financial
        statements.
 
 In
        December 2007, the FASB issued SFAS No. 141 (revised 2007) (“SFAS 141(R)”)
“Business Combinations,” which replaces SFAS 141 “Business Combinations.” This
        Statement improves the relevance, completeness and representational faithfulness
        of the information provided in financial reports about the assets acquired
        and
        liabilities assumed in a business combination. This Statement requires an
        acquirer to recognize the assets acquired, the liabilities assumed, and any
        noncontrolling interest in the acquiree at the acquisition date, measured
        at
        their fair values as of that date, with limited exceptions specified in the
        Statement. Under SFAS 141 (R), the acquisition-related costs, including
        restructuring costs, must be recognized separately from the acquisition and
        will
        generally be expensed as incurred. That replaces SFAS 141’s cost-allocation
        process, which required the cost of an acquisition to be allocated to the
        individual assets acquired and liabilities assumed based on their estimated
        fair
        values. SFAS 141(R) shall be applied prospectively to business combinations
        for
        which the acquisition date is on or after the beginning of the first annual
        report period beginning on or after December 15, 2008. The Company will
        implement this Statement in 2009.
 
 In
        December 2007, the FASB issued SFAS No.160 “Non-Controlling Interests in
        Consolidated Financial Statements – An Amendment of ARB No. 151” (“SFAS
        160”). SFAS 160 established new accounting and reporting standards for the
        non-controlling interest in a subsidiary and for the deconsolidation of a
        subsidiary. Specifically, this Statement requires the recognition of
        non-controlling interests (minority interests) as equity in the consolidated
        financial statements and separate from parent’s equity. The amount of net income
        attributable to the non-controlling interest will be included in consolidated
        net income on the face of the income statement. SFAS 160 clarifies that changes
        in a parent’s ownership in a subsidiary that does not result in deconsolidation,
        are equity transactions if the parent retains its controlling financial
        interest. In addition, this Statement requires that a parent recognize a
        gain or
        loss in net income when a subsidiary is deconsolidated. Such gain or loss
        will
        be measured using the fair value of the non-controlling equity investment
        as of
        the deconsolidation date. SFAS 160 also includes expanded disclosure
        requirements regarding the interest of the parent and its non-controlling
        interest. SFAS 160 is effective for fiscal years, and interim periods other
        than
        fiscal years, beginning on or after December 2008. The Company will adopt
        SFAS
        No. 160 on January 1, 2009, as required, and is currently evaluating the
        impact
        of the adoption of this Statement on its financial statements.
  Page
            12
  In
        March
        2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
        and Hedging Activities,” an amendment of FASB Statement No. 133 (“SFAS No.
        161”). The new standard is intended to improve financial reporting about
        derivative instruments and hedging activities by requiring enhanced disclosures
        to enable investors to better understand their effects on an entity’s financial
        position, financial performance and cash flows. It is effective for financial
        statements issued for fiscal years and interim periods beginning after November
        15, 2008. The Company does not believe that SFAS No. 161 will have a material
        impact on its financial statements.
 
 2.
        INVESTMENTS
 
 The
        Company has investments in public and private securities of the United States
        and Latin American countries as well as long-term investments in oil and
        gas
        concessions. The fair market value of these investments at March 31, 2008
        and
        December 31, 2007 is indicated below.
 
 March
                  31,
              
              December
                  31,2008
              
              2007Public
                  securities
              
              $
              —
              
              $
              322,300Private
                  securities
              
              
              2,409,596
              
              
              4,386,720Current
                  investments
              
              
              2,409,596
              
              
              4,709,020Investments
                    in oiland
                    gas concessions
              
              
              2,300,000
              
              
              2,300,000
 
 3.
        PROPERTY AND EQUIPMENT
 
 March
                  31,
              
              December
                  31,2008
              
              2007Equipment
              
              $
              455,035
              
              $
              455,035Deposits
                  on land
              
              
              —
              
              
              —Leasehold
                  improvements
              
              
              7,807
              
              
              7,807462,842
              
              
              462,842Less
                  accumulated depreciation
              
              
              105,927
              
              
              94,719$
              356,915
              
              $
              368,123
  Page
            13
  Depreciation
        expense for the three months ended March 31, 2008 and 2007, amounted to $11,208
        and $11,333, respectively.
 
 4.
        INTANGIBLE ASSETS
 
 Intangible
        assets are intellectual property included in a patent application. If the
        patent
        is not issued, the Company will write-off the unamortized amounts immediately.
        Amortization expense was $1,788 and $1,788 for the three months ended March
        31,
        2008 and 2007, respectively. Other intangible assets consist of the
        following:
 
 March
                  31,
              
              December
                  31,2008
              
              2007Gross
                  Carrying Amount
              
              $
              143,000
              
              $
              143,000Accumulated
                  Amortization
              
              
              18,471
              
              
              16,683Intellectual
                  property costs
              
              $
              124,529
              
              $
              126,317
 
 
 Estimated
        amortization expense for intangible assets for the next five years is as
        follows:
 
 EstimatedYear Ending
              
              AmortizationDecember 31,
              
              Expense2008
              
              
              5,3642009
              
              
              7,1502010
              
              
              7,1502011
              
              
              7,1502012
              
              
              7,150
 
 2008
        represents amortization from April 1, through December 31, 2008.
 
 5.
        INVESTMENT IN JOINT VENTURES
 
 a.
              In
                  December 2003, the Company formed a joint venture to develop Section
                  124,
                  low income housing in the Commonwealth of Puerto Rico. The Company
                  became
                  the general partner and 75% majority owner of a limited partnership,
                  Delta
                  Development Partners, LP that owns the 85% majority share of Delta
                  Developers Corp., a Puerto Rico corporation, formed to manage the
                  construction and related activities required to build approximately
                  270
                  homes under Section 124. During the year ended December 31, 2006,
                  the
                  activities associated with this joint venture were discontinued.
 
 In
        October 2004, the Company formed a second joint venture to develop Section
        124
        low income housing in Puerto Rico. The Company became the general partner
        and
        majority owner of a limited partnership, Delta Development Partners II, LP
        that
        owns the 85% majority share of Delta Developers Guayanilla Corp., a Puerto
        Rico
        corporation formed to manage the construction and related activities required
        to
        build approximately 300 homes under Section 124. During the first quarter
        of
        2007, the activities associated with this joint venture were discontinued
        and
        the land deposit was returned to the joint venture.
  Page
            14
  In
        November 2006, the Company entered into a new joint venture to develop Section
        124 housing in Puerto Rico. The Company became the general partner and 35%
        minority owner of limited partnership, Delta TA, LP formed to manage the
        construction and related activities to build approximately 338 residential
        units
        under the Section 124 program. As of the quarter ended September 30, 2007,
        the
        activities associated with this partnership have been discontinued.
 
 b.
              On
                  January 14, 2004, the Company entered into a joint venture agreement
                  with
                  Hi tech Consulting and Construction, Inc. (“Hi Tech”) forming
                  Delta-Envirotech, Inc. for the purpose of providing environmental
                  technologies and services to markets in the Middle East. The joint
                  venture
                  company is based in Virginia and focuses on participating in foreign
                  government sponsored pollution remediation and other
                  projects.
 
 In
        July
        2004, the Company and Hi-Tech, pursuant to an agreement to purchase stock
        dated
        January 14, 2004, each sold 75 shares of the joint venture to a third party,
        representing a ten percent (10%) interest for $2. The Company and Hi-Tech
        each
        own forty-five percent (45%) of the joint venture.
 
 Delta-Envirotech,
        Inc. meets the definition of a Variable Interest Entity as defined in Financial
        Accounting Standards Board Interpretation No. 46 (FIN 46),"Consolidation
        of
        Variable Interest Entities" requiring the primary beneficiaries of a variable
        interest entity to consolidate that entity. The primary beneficiary of a
        variable interest entity is the party that absorbs the majority of the expected
        losses of the entity or receives a majority of the entity's expected residual
        return, or both, as a result of ownership, contractual or other financial
        interest in the entity.
 
 c.
              Minority
                  interests primarily consist of outside investors ownership interest
                  in
                  Delta Development Partners, L.P.; Delta Development Partners II,
                  L.P.;
                  Delta TA, LP; Delta Developers Corp.; Delta Developers Guayanilla
                  Corp.;
                  Delta-Envirotech, Inc. and PT Triyudha–
                  Envirotech.
 
 The
        income and losses from operations of these entities and their respective
        minority interests have been reflected in the Company's statement of operations
        for the three months ended March 31, 2008 and 2007. There are excess losses
        not
        absorbed by the minority interests due to limitations of their capital
        contributions. In future periods, the profits first attributable to the minority
        interests will be first absorbed against any unused losses until the losses
        are
        fully absorbed. The amount on the Company's consolidated balance sheet
        represents the minority interests as of March 31, 2008 and December 31,
        2007.
  Page
            15
  The
        following represents a schedule of minority interests as of:
 
 March
                  31,
              
              December
                  31,2008
              
              2007Delta
                  Development Partners L.P.
              
              $
              81,966
              
              $
              82,087Delta
                  Development Partners II, L.P.
              
              
              36,739
              
              
              36,808Delta
                  TA L.P.
              
              
              106,871
              
              
              106,902Delta
                  Developers Corp.
              
              
              —
              
              
              —Delta
                  Developers Guayanilla Corp.
              
              
              —
              
              
              —Delta-Envirotech,
                  Inc.
              
              
              —
              
              
              —PT
                  Triyudha - Envirotech
              
              
              —
              
              
              —$
              225,576
              
              $
              225,797
 
 6.
        NOTES
        PAYABLE
 
 In
        April
        2005, the Company issued three 8% term notes to private investors in the
        amount
        of $210,655, with the principal and interest due at maturity on October 2,
        2005.
        Pursuant to note modification agreements, the maturity dates of these notes
        were
        extended and in June 2006 these notes became payable on written demand by
        the
        lenders. In March 2008, the Company paid $60,000 of the principal amount
        of the
        original notes and each of the three notes was amended and restated. By
        amendment, the noteholders waived all of the accrued and unpaid interest
        on the
        original notes and the aggregate principal amount was reduced to $150,655.
        The
        amended and restated notes bear interest of 8% and mature in November 2008.
        Interest expense for the three months ended March 31, 2008 and 2007 amounted
        to
        $(36,856) and $4,213, respectively. As of March 31, 2008 and December 31,
        2007,
        accrued interest of $1,004 and $37,860, respectively, is included in accrued
        expenses on the Company's consolidated balance sheet.
 
 In
        May
        2006, the Company borrowed $30,000 from an investor (formerly a related party)
        at interest of 6% per annum with the principal and interest due on May 17,
        2008.
        In May 2008, the note was amended extending the maturity date to August 2008.
        Interest expense for the three months ended March 31, 2008 and 2007 amounted
        to
        $450 and $450, respectively. As of March 31, 2008 and December 31, 2007 accrued
        interest of $3,372 and $2,922, respectively, is included in accrued expenses
        on
        the Company's consolidated balance sheet.
 
 In
        August
        2007, the SAHF borrowed $2,300,000 from Oxipetrol-Petroleros de Ocidente,
        S.A.
        in conjunction with its investment in oil and gas concessions. This is a
        non
        interest-bearing loan that matures on July 15, 2008. The principal amount
        of
        $2,300,000 is included in Notes payable on the Company’s consolidate balance
        sheet at March 31, 2008 and December 31, 2007.
  Page
            16
  7.
        CONVERTIBLE DEBT
 
 During
        the year ended December 31, 2004, the Company issued convertible notes in
        the
        principal amounts of $961,400. The convertible notes had interest rates from
        4%
        to 6% and matured at various dates between May 12, 2006 and January 16, 2007.
        These notes are convertible into common stock at a conversion price of $0.05
        to
        $0.125 per share. One note, in the original principal amount of $129,160
        that
        originally matured in May 2006 was amended during 2006 and 2007 extending
        the
        maturity date until June 2008. After partial conversion of the principal
        amount
        of this note in July 2006, and the payment of accrued interest in March 2007,
        the remaining principal amount and all accrued interest was converted into
        1,491,886 shares of common stock in April 2008. Another note, in the principal
        amount of $193,740 that originally matured in May 2006 was amended during
        2006
        and 2007 extending the maturity date to December 1, 2007. The Company did
        not
        repay the note on the maturity date but the holder of this note has verbally
        agreed not to make written demand for payment. The Company is currently
        negotiating amended terms with the noteholder. If the Company and the noteholder
        can not agree upon an amendment to the note, including an extension of the
        maturity date, the Company may receive a notice of default. One note issued
        by
        the Company in the principal amount of $60,000, became payable upon written
        demand by the lender in September 2006. The balance of the convertible notes
        issued in 2004 was converted into 12,923,280 shares of common stock through
        March 31, 2008.
 
 In
        connection with the issuance of the convertible notes, the Company issued
        8,880,000 common stock purchase warrants at an exercise price of $0.10 per
        share. The warrants expired March 31, 2006.
 
 The
        Company accounted for the warrants and the convertible debt with detachable
        warrants in accordance with Emerging Issues Task Force 00-27 and 00-19 and
        SFAS
        No. 33. The Company performed calculations allocating the proceeds of
        convertible debt with detachable warrants to each respective security at
        their
        fair values. The Company used the conversion value of the convertible debt
        and
        calculated fair value of the warrants using the Black-Scholes valuation model
        for its estimate of fair value. The Company compared the allocated proceeds
        of
        the convertible debt to the difference between its conversion value and face
        amount. The calculated fair value of the convertible debt of $722,855 was
        recorded as the value of the Beneficial Conversion Feature and accordingly
        credited to Additional Paid-in Capital. The value of the warrants of $235,545
        was recorded as a reduction of the convertible debt. The convertible debt
        was
        recorded at zero. The convertible debt was accreted to its face value after
        2004, 2005 and 2006 conversions, under the interest method per APB 21, until
        it
        either converted or matured.
 
 In
        May
        2006, the Company issued a convertible note to a related party in the principal
        amount of $16,000, bearing interest at 6% per annum. The note was convertible
        into common stock at a conversion price of $0.06 per share, the fair value
        at
        the date of issuance. The note matured on November 3, 2007 and upon maturity
        the
        Company issued 266,667 shares of common stock in payment of the principal
        amount
        and 24,000 shares of common stock in payment of $1,440 of accrued
        interest.
  Page
            17
  During
        the first quarter of 2007, the Company issued a convertible note to a related
        party in the principal amount of $17,000, and a convertible note to an investor
        in the principal amount of $266,000. Both notes bear interest of 6% per annum
        and are convertible into common stock at a conversion price of $0.05 per
        share,
        the fair value at the date of issuance. Both notes matured in April 2008.
        In
        conjunction with the issuance of these two notes, the Company reclassified
        $266,000 recorded as deferred stock purchase, on its consolidated balance
        sheet
        as of December 31, 2006, to convertible notes at March 31, 2007. On October
        30,
        2007, the holder of the $266,000 note converted the principal amount of the
        note
        into 5,320,000 shares of common stock and waived all accrued interest. In
        April
        2008, the Company issued 340,000 shares of common stock in payment of the
        principal amount of the $17,000 note and issued 20,400 shares of common stock
        in
        payment of the accrued interest of $1,020.
 
 In
        April
        2007, the Company issued a convertible note to a related party in the principal
        amount of $26,600 bearing interest of 6% per annum and convertible into common
        stock at the conversion price of $0.05 per share, the fair value at the date
        of
        issuance, with a maturity date of April 9, 2008. On the maturity date, the
        Company issued 532,000 shares of common stock in payment of the principal
        amount
        and 31,920 shares of common stock in payment of the accrued interest of
        $1,596.
 
 During
        the second and third quarters of 2007, the Company borrowed $550,000 from
        an
        investor pursuant to the terms of a convertible promissory note with a maturity
        date of May 2008; interest of 10% per annum; and convertible into common
        stock
        at the conversion price of $0.05 per share, the fair value at the date of
        issuance. In September 2007, the investor converted the principal amount
        of the
        note into 11,000,000 shares of common stock and waived all accrued interest.
 
 At
        March
        31, 2008, the Company's outstanding convertible notes were convertible into
        4,421,920 shares of common stock.
 
 The
        following table shows the maturities by year of total face amount of the
        convertible debt obligations at March 31, 2008:
 
 2008
              
              $
              397,340$
              397,340
 
 For
        the
        three months ended March 31, 2008 and 2007, the Company recorded interest
        expense of $3,591 and $3,219, respectively. As of March 31, 2008 and December
        31, 2007, accrued interest of $43,249 and $22,931; respectively, is included
        in
        accrued expenses on the Company's consolidated balance sheet.
 
 8.
        ACCRUED EXPENSES
 
 Accrued
        expenses consists of the following:
 
 March
                  31,
              
              December
                  31,2008
              
              2007Professional
                  fees
              
              $
              49,257
              
              $
              34,703Interest
                  expense
              
              
              48,230
              
              
              80,439Payroll
                  expense
              
              
              494,661
              
              
              462,195Payroll
                  expense-officers
              
              
              126,061
              
              
              117,436Payroll
                  tax expense
              
              
              38,614
              
              
              34,742Accrued
                  consulting fees
              
              
              144,000
              
              
              144,000Other
                  accrued expenses
              
              
              382,859
              
              
              352,159$
              1,283,682
              
              $
              1,225,674
  Page
            18
  9.
        LOANS
        FROM RELATED PARTIES
 
 In
        March
        2008, the Company borrowed $121,000, in the aggregate, from two stockholders
        of
        the Company, with interest of 6% per annum and the principal and interest
        due on
        September 6, 2008. The balance due to the stockholders is included in Notes
        Payable on the Company’s consolidated balance sheet at March 31, 2008. Accrued
        interest of $605 is included in accrued expenses on the Company’s consolidated
        balance sheet at March 31, 2008.
 
 10.
        OTHER
        RELATED PARTY TRANSACTION
 
 The
        Company's subsidiary, Delta-Envirotech, Inc. ("Envirotech") pays monthly
        office
        rent to David Razmara, the president of Envirotech and
        a
        stockholder of the Company, in the current amount of $2,000. The
        rent
        expense for the three months ended March 31, 2008 and 2007 amounted to $6,000,
        respectively.
 
 11.
        STOCKHOLDERS' EQUITY
 
 The
        Company issues shares of common stock for services and repayment of debt
        and
        interest valued at fair market value at time of issuance.
 
 a.
        For
        the three months ended March 31, 2008 and 2007, the Company issued -0- and
        111,040 shares of common stock, respectively, for payment of accrued interest
        in
        the amount of $-0- and $13,880, respectively, valued at $-0- and $0.125 per
        share.
 
 b.
        For
        the three months ended March 31, 2008 and 2007, the Company issued 10,000,000
        and -0- shares of common stock, respectively, for services valued at $200,000
        and -0-, respectively, valued at $0.02 per share.
 
 12.
        DISCONTINUED OPERATIONS
 
 As
        of
        September 30, 2007, the Company adopted a formal plan to discontinue all
        its
        operations in Puerto Rico. As a result of the Company’s decision, the operations
        of Delta Development Partners, LP; Delta Developers Corp.; Delta Development
        Partners II, LP; Delta Developers Guayanilla Corp., and Delta TA, LP have
        been
        classified as discontinued operations. The assets and liabilities, results
        of
        operations, and cash flows of these discontinued operations have been included
        with the operations of the Company in its consolidated financial statements
        due
        to the immaterial nature of the transactions.
  Page
            19
  13.
        BUSINESS SEGMENT INFORMATION
 
 The
        Company’s reporting business segments are geographic and include the Far East
        (Indonesia), the Middle East, North America (United States) and South America.
        The Company formerly operated in a fifth reporting segment, Puerto Rico.
        The
        primary criteria by which financial performance is evaluated and resources
        allocated are revenue and operating income.
 
 The
        following is a summary of key financial data:
 
 Three Months EndedMarch 31,2008
              
              2007Total
                  Revenue:North
                  America
              
              $
              —
              
              $
              —Indonesia
              
              
              —
              
              
              —Middle
                  East
              
              
              —
              
              
              —Puerto
                  Rico
              
              
              —
              
              
              —South
                  America
              
              
              (2,060,953
              )
              
              (483,523
              )$
              (2,060,953
              )
              $
              (483,523
              )Loss
                  from Operations:North
                  America
              
              $
              (554,371
              )
              $
              (515,677
              )Indonesia
              
              
              (8,988
              )
              
              (8,988
              )Middle
                  East
              
              
              (38,006
              )
              
              (5,000
              )Puerto
                  Rico
              
              
              (313
              )
              
              (12,270
              )South
                  America
              
              
              (2,060,975
              )
              
              (488,894
              )$
              (2,662,653
              )
              $
              (1,030,829
              )
 
 14.
        INCOME TAXES
 
 The
        Company adopted the provisions of Financial Accounting Standards Board
        Interpretation No. 48 “Accounting for Uncertainties in Income Taxes,” (“FIN 48”)
        on January 1, 2007. As a result of the implementation of FIN 48, the Company
        recognized no adjustment in the net liability for unrecognized income tax
        benefits.
  15.
        SHARE
        BASED COMPENSATION
 
 On
        January 1, 2006, the Company adopted SFAS No. 123(R) "Share-Based Payment,"
        requiring the recognition of compensation expense in the Consolidated Statements
        of Operations related to the fair value of its employee share-based options
        and
        awards. SFAS No. 123(R) revises SFAS No. 123 "Accounting for Stock-Based
        Compensation" and supercedes APB Opinion No. 25 "Accounting for Stock Issued
        to
        Employees." SFAS No. 123(R) is supplemented by SEC Staff Accounting Bulletin
        ("SAB") No.107 "Share-Based Payment." SAB No.107 expresses the SEC staff's
        views
        regarding the interaction between SFAS No. 123(R) and certain SEC rules and
        regulations including the valuation of share-based payment
        arrangements.
  Page
            20
  The
        Company recognizes the cost of all employee stock options on a straight-line
        attribution basis over their respective contractual terms, net of estimated
        forfeitures. The Company has selected the modified prospective method of
        transition; accordingly, prior periods have not been restated. Prior to adopting
        SFAS No. 123(R), the Company applied APB Opinion No. 25, and related
        interpretation in accounting for its stock-based compensation plans. All
        employee stock options were granted at or above the grant date market price.
        Accordingly, no compensation cost was recognized for fixed stock option
        grants.
 
 At
        March
        31, 2008 and 2007, the Company had one share-based compensation plan, which
        is
        described below. During the three months ended March 31, 2008 and 2007, the
        adoption of SFAS No.123(R) resulted in an aggregate pretax compensation expense
        recognized in net loss for stock based compensation of $196,745 and $196,745,
        respectively. For the three months ended March 31, 2008 and 2007, the aggregate
        pretax compensation expense caused basic and diluted earnings per common
        share
        to decrease by $-0- and $0.01 per share, respectively.
 
 The
        Company also issues shares of its common stock to non-employees as stock-based
        compensation. The Company accounts for the services using the fair market
        value
        of the services rendered. For the three months ended March 31, 2008 and 2007,
        the Company issued 10,000,000 and -0- shares, respectively, and recorded
        compensation expense of $200,000 and $-0-, respectively, in conjunction with
        the
        issuance of these shares.
 
 Stock
        Option Plan
 
 In
        December 2001, the Company's stockholders approved the 2001 Employee Stock
        Option Plan (the "2001 Plan"), pursuant to which 2,000,000 shares of common
        stock were reserved for issuance. In August 2004, the Company's stockholders
        approved the 2004 Stock Option Plan (the "2004 Plan"), pursuant to which
        10,000,000 shares of common stock were reserved for issuance. As of March
        31,
        2008, there were 3,002,000 shares of common stock available for issuance
        under
        the 2004 Plan.
 
 The
        Company was also authorized to issue shares of stock to its employees from
        its
        2001 Plan. The Company expensed the issuance of stock awards in accordance
        with
        SFAS No. 123. Shares issued from the 2001 Plan were expensed at the time
        of
        issuance, as the stock issued had no restrictions to the employees.
 
 The
        Company did not issue any stock options to its employees during the three
        months
        ended March 31, 2008 and 2007.
 
 A
        summary
        of the option activity under the 2004 Plan as of December 31, 2007 and changes
        during the three months ended March 31, 2008, is presented below.
  Page
            21
  Options
              
              Shares
              
              Weighted-Average
                Exercise
                  Share Price
              
              Weighted-
                Average
                Remaining
                Contractual
                Term
              
              Aggregate
                Intrinsic
                ValueOutstanding
                  at January 1, 2008
              
              
              7,978,000
              
              $
              0.11Options
                  granted
              
              
              -
              
              $
              -Options
                  exercised
              
              
              -
              
              $
              -Options
                  cancelled/expired
              
              
              (980,000
              )
              $
              0.11Outstanding
                  at March 31, 2008
              
              
              6,998,000
              
              $
              0.11
              
              
              3.2
              
              $
              (419,880
              )Exercisable
                  at March 31, 2008
              
              
              6,998,000
              
              $
              0.11
              
              
              3.2
              
              
              —
 
 Stock
        compensation expense applicable to stock options for the three months ended
        March 31, 2008 and 2007 was approximately $196,745 and $196,745, respectively.
        The aggregate intrinsic value of options outstanding as of March 31, 2008
        and
        December 31, 2007 was $(419,880) and $(398,900), respectively.
  At
        March
        31, 2008, there was $1,212,525 of total unrecognized compensation cost related
        to share-based compensation arrangements granted under the 2004 Plan. The
        cost
        is expected to be recognized over a weighted average period of 3.2
        years.
 
 16.
        COMMITMENTS AND CONTINGENCIES
  Consulting
        Agreements
 
 In
        August
        2005, Delta Technologies, Inc. entered into a consulting agreement with Richard
        F. Straub, Jr. ("Straub") for a period of three years, to provide ongoing
        technical assistance and support in the production of Technologies' insulating
        concrete wall forming products.
 
 For
        the
        three moths ended March 31, 2008 and 2007, consulting fees of $13,200 and
        $13,200, respectively have been expensed and $79,167 and $29,167, respectively,
        of the stock value associated with the issuance of shares to Straub is included
        in accrued expenses on the Company's consolidated balance sheet.
 
 Page
            22
 
 17.
        SUBSEQUENT EVENTS
 
 a.
              In
                  April 2008, the Company issued 924,320 shares of common stock as
                  payment
                  of $43,600 principal amount and accrued interest, pursuant to two
                  convertible notes issued by the Company in April 2007. Also in
                  April 2008,
                  the Company issued 1,491,885 shares of common stock as payment
                  of $100,000
                  principal amount and accrued interest pursuant to a convertible
                  note
                  issued by the Company in May 2004.
 
 b.
              In
                  April 2008, the Company issued 550,000 shares of common stock to
                  a
                  consultant for services valued at $38,500, at a price per share
                  of $0.07.
 
 c.
              During
                  the second quarter of 2008, the Company borrowed $46,450, in the
                  aggregate, from two stockholders of the Company pursuant to 6%
                  promissory
                  notes maturing in October and November 2008.
  Page
            23





**ITEM 2.**
            **MANAGEMENT'S
                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND****RESULTS
                OF OPERATIONS**




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




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




GENERAL




We
      were
      incorporated in the State of Delaware on November 17, 1999. Since current
      management joined the Company in 2003, our principal business activities focused
      on providing environmental and construction technologies and services in the
      Far
      East, the Middle East, and the United States.





On
      March
      4, 2008, we entered into a Membership Interest Purchase Agreement (the
“Agreement”) with
      Egani, Inc., an Arizona corporation (“Egani”). Pursuant to the Agreement, we
      acquired from Egani 100% of the issued and outstanding membership interests
      held
      by Egani in Altony S.A., an
      Uruguay Sociedad Anonima, (“Altony”) which owns 100% of the issued and
      outstanding membership interests in South American Hedge Fund LLC, a Delaware
      limited liability company (“South American
      Hedge Fund”). At the closing of the Agreement, we issued 130,000,000 shares of
      our Common
      stock to Egani for the purchase of all of its interest in Altony which
      constituted, following such issuance, a majority of the outstanding shares
      of
      our common stock. Immediately following the closing of the Agreement, Altony
      became a wholly owned subsidiary of the Company. For accounting purposes, the
      transaction was treated as a recapitalization of the Company with Altony as
      the
      acquirer.





The
      principal business of Altony is the ownership and management of South American
      Hedge Fund, a
      hedge
      fund that maintains its business office in Uruguay and invests in public and
      private securities of the United States and Latin American countries. South
      American Hedge Fund also plans
      to
      proceed with investments in oil and gas concessions in Argentina and intends
      to
      focus its
      investments in the energy sector, including development of energy producing
      investments and alternative energy production in Latin America and the United
      States.





RESULTS
      OF OPERATIONS





During
      the three months ended March 31, 2008, we incurred a net loss of $2,623,149
      primarily attributable to operating expenses related to the South American
      Hedge
      Fund. 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 additional
      financing or that such financing will be on terms favorable to us. The inability
      to obtain additional
      financing when needed would have a material adverse effect on our operating
      results.





THREE
      MONTHS ENDED MARCH 31, 2008 COMPARED TO THE THREE MONTHS ENDED MARCH 31,
      2007.





During
      the three months ended March 31, 2008, we incurred a net loss of approximately
      $2,600,000 compared to a net loss of approximately $1,068,000 for the three
      months ended March 31, 2007.





The
      increase in our operating loss for the three months ended March 31, 2008 over
      the comparable period of the prior year was due to an increase of approximately
      $1,577,000 in expenses related the to investment portfiolio; an increse in
      general and administrative expenses of approximately $61,000 and an increase
      in
      the minority interest share of the loss of our consolidated subsidiaries of
      approximately $44,000.


Page
          24




PLAN
            OF
            OPERATION





*Energy
      Sector*





The
      Company’s newly-acquired South American Hedge Fund subsidiary has oil and gas
      investments in Argentina and will continue to focus on the energy sector,
      including the development and supply of energy and alternative energy sources
      in
      Latin America and the United States.





In
      August
      2007, South American Hedge Fund signed a purchase option for three interests
      in
      oil and gas concessions in Argentina. We are in the process of obtaining the
      necessary government and environmental operating permits for our operation
      of
      these concessions. Our
      primary focus will be, upon receipt of the governmental approvals relative
      to
      our investment in these concessions, to
      develop operating wells on these properties over the near term.




To
      supplement our growth, we may also consider mergers and acquisitions, although
      we have no acquisitions contemplated or under discussion at this
      time.




In
      addition, we are currently evaluating newly developed alternative energy
      technologies for possible investment and development.





*Environmental
      and Construction Technologies and Services*





Following
      the acquisition of Altony and South America Hedge Fund, we have continued to
      pursue environmental
      remediation and other projects in the Middle East and Far East. These activities are
      conducted by our joint venture subsidiary, Delta-Envirotech, Inc.
      (“Envirotech”). We have operating control of Envirotech and hold a 45% percent
      ownership interest. Envirotech has entered
      into strategic alliance agreements with several United States-based entities
      with technologies and products in the environmental field to support its
      activities.




In
      the
      Middle East, we reached a working agreement to provide equipment to manufacture
      insulating concrete form (ICF) products for the building industry in Saudi
      Arabia. Envirotech expanded its product line by securing the master distribution
      rights for the Middle East for a gas-imaging product used in oilfield and
      refining operations that has been approved for testing by ARAMCO, the
      Saudi
      government oil company. ARAMCO has scheduled field trials to test this equipment
      in August 2008.





We
      have
      decided not to pursue a second contract in Indonesia and withdraw from this
      market. Our
      decision was based on the additional expenses we would incur to met the new
      requirement of
      Pertamina (the government-owned oil company), that our processing equipment
      be
      moved off the
      refinery property. We are currently evaluating whether to redeploy the
      processing equipment or
      sell
      it to a third party.





Our
      construction technology activities are conducted by our wholly owned subsidiary,
      Delta Technologies, Inc. (“Technologies”). In August 2005, Technologies acquired
      certain intellectual property and filed a patent application for a new
      insulating concrete wall forming (ICF) system, call *Delta
      Wall* .
      We
      intend to license the *Delta
      Wall* technology and seek other cooperative arrangements with respect to this
      technology.





LIQUIDITY





At
      March
      31, 2008 we had a working capital deficit of $2,021,654, compared with a surplus of
      $191,976 at December 31, 2007. This decrease at March 31, 2008 is a result
      of a
      decrease in current investments of approximately $2,300,000.





ASSETS





At
      March
      31, 2008, we had total assets of $5,206,301, compared to total assets of $7,563,657
      at December 31, 2007. The decrease in total assets was primarily due to the decrease
      in current assets of approximately $2,300,000.





CRITICAL
      ACCOUNTING ISSUES





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


Page
          25




Other
      Matters





Accounting
      Pronouncements




In
      February 2007, the FASB issued SFAS No. 159 (“SFAS 159”) “The Fair Value Option
      for Financial Assets and Financial Liabilities,” providing companies with an
      option to report selected financial assets and liabilities at fair value. The
      Standard’s objective is to reduce both complexity in accounting for financial
      instruments and the volatility in earnings caused by measuring related assets
      and liabilities differently. It also requires entities to display the fair
      value
      of those assets and liabilities for which the Company has chosen to use fair
      value on the face of the balance sheet. The adoption of SFAS 159 on January
      1,
      2008 did not impact the Company’s consolidated financial
      statements.




In
      December 2007, the FASB issued SFAS 141(R), which replaces SFAS 141 “Business
      Combinations.” This Statement is intended to improve the relevance, completeness
      and representational faithfulness of the information provided in financial
      reports about the assets acquired and the liabilities assumed in a business
      combination. This Statement requires an acquirer to recognize the assets
      acquired, the liabilities assumed, and any noncontrolling interest in the
      acquiree at the acquisition date, measured at their fair values as of that
      date,
      with limited exceptions specified in the Statement. Under SFAS 141(R),
      acquisition-related costs, including restructuring costs, must be recognized
      separately from the acquisition and will generally be expensed as incurred.
      That
      replaces SFAS 141’s cost-allocation process, which required the cost of an
      acquisition to be allocated to the individual assets acquired and liabilities
      assumed based on their estimated fair values. SFAS 141(R) shall be applied
      prospectively to business combinations for which the acquisition date is on
      or
      after the beginning of the first annual report period beginning on or after
      December 15, 2008. The Company will implement this Statement in
      2009.





In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements – an amendment of ARB No. 51” (“SFAS No.
      160”). SFAS No. 160 amends Accounting Research Bulletin (“ARB”) No. 51 to
      establish accounting and reporting standards for the noncontrolling (minority)
      interest in a subsidiary and for the deconsolidation of a subsidiary. It
      clarifies that a noncontrolling interest in a subsidiary is an ownership
      interest in the consolidated entity that should be reported as equity in the
      Consolidated Financial Statements. SFAS No. 160 also requires consolidated
      net
      income to be reported at amounts that include the amounts attributable to both
      the parent and the noncontrolling interest on the face of the consolidated
      statement of income. Under SFAS No. 160, the accounting for changes in a
      parent’s ownership interest in a subsidiary that do not result in
      deconsolidation must be accounted for as equity transactions for the difference
      between the parent’s carrying value and the cash exchanged in the transaction.
      In addition, SFAS No. 160 also requires that a parent recognize a gain or loss
      in net income when a subsidiary is deconsolidated (except in the case of a
      spin-off), and requires expanded disclosure in the Consolidated Financial
      Statements that clearly identify and distinguish between the interests of the
      parent’s ownership interest and the interests of the noncontrolling owners of a
      subsidiary. This Statement is effective for fiscal years, and interim periods
      within those fiscal years, beginning on or after December 15, 2008. The Company
      will adopt SFAS No. 160 on January 1, 2009, as required, and is currently
      evaluating the impact of such adoption on its financial statements.





In
      March
      2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
      and Hedging Activities,” an amendment of FASB Statement No. 133 (“SFAS No.
      161”). The new standard is intended to improve financial reporting about
      derivative instruments and hedging activities by requiring enhanced disclosures
      to enable investors to better understand their effects on an entity’s financial
      position, financial performance and cash flows. It is effective for financial
      statements issued for fiscal years and interim periods beginning after November
      15, 2008. The Company does not believe that SFAS No. 161 will have a material
      impact on its financial statements.





FOREIGN
      CURRENCY TRANSLATION





The
      functional currency for some foreign operations is the local currency. Assets and liabilities of foreign operations are translated
      at balance
      sheet date
      rates of exchange and income, expense and cash flow items are translated atthe
      average exchange rate for the period. Translation adjustments in futureperiods
      will be recorded in Other Comprehensive Income. The translation gains orlosses
      were not material for the periods ended March 31, 2008 and
      2007.




Page
          26


GOODWILL
      AND OTHER INTANGIBLES





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





**ITEM
      3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK.**





We
      are
      primarily exposed to foreign currency risk, interest rate risk and commodity
      price risk.





Foreign
      Currency Risk - Our financial results could be affected by factors such as
      changes in foreign currency exchange rates or, weak economic conditions in
      foreign markets. Because our revenue is reported in U.S. dollars, fluctuating
      exchange rates of the local currency, when converted into U.S. dollars, may
      have
      an adverse impact on our revenue and income. We have not hedged foreign
      currency exposures related to transactions denominated in currencies other
      than
      U.S. dollars. We do not engage in financial transactions for trading or
      speculative purposes.





Interest
      Rate Risk - Interest rate risk refers to fluctuations in the value of a security
      resulting from changes in the general level of interest rates. Investments that
      are classified as cash and cash equivalents have original maturities of three
      months or less. Interest income is sensitive to changes in the general level
      of
      U.S. interest rates. Although
      we have significant short-term investments, due to the short-term nature of
      our investments, we believe that there is not a material risk
      exposure.





Commodity
      Price Risk – With operations in the energy sector, our results will be
      dependent on the pricing of energy commodities.




**ITEM
      4T. CONTROLS AND PROCEEDURES**




a.
      Disclosure controls and procedures.


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




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.**





None.


Page
          27




**ITEM
      1A.**  **RISK
      FACTORS.**





There
      are
      material changes in the risk factors previously disclosed in our 10-KSB for
      the
      year ended December 31, 2007, which additional risk factors are relevant to
      and
      should be considered in connection with an evaluation of our energy and
      alternative energy businesses related to the acquisition of the South American
      Hedge Fund. These additional risks are as follows.





*Volatile
      global commodity pricing in the energy sector would strongly affect our results
      of operations.*





In
      our
      investments in the energy sector, our financial results would be governed by
      the
      volatile prices of energy commodities. Drilling and exploration activity levels,
      inventory levels, production disruptions, the actions of OPEC, competing fuel
      prices, prevailing currency exchange rates, price speculation, changes in
      consumption patterns, weather and geophysical and technical limitations and
      other matters affect the supply of oil and gas and contribute to price
      volatility.




*Our
      investments in the energy sector could involve many operating risks that may
      result in substantial losses for which insurance may be unavailable or
      inadequate.*




Operations
      in the energy production sector are subject to hazards and risks inherent in
      operational and environmental hazards. Any of these risks can cause substantial
      losses resulting from injury or loss of life, damage to or destruction of
      property, natural resources and equipment, pollution and other environmental
      damages, regulatory investigations and penalties, suspension of our operations
      and repair and remediation costs.




*Our
      oil and natural gas production investments depend on oil and natural gas
      transportation facilities, most of which are owned by others.*




The
      marketability of our oil and natural gas production depends in large part on
      receiving governmental approvals, the availability, proximity and capacity
      of
      pipeline systems owned by third parties. The unavailability of or lack of
      available capacity on these systems and facilities could result in the shut-in
      of producing wells or the delay or discontinuance of development plans for
      properties. The lack of availability of these facilities for an extended period
      of time could negatively affect our revenues. Federal and state regulation
      of
      oil and natural gas production and transportation, tax and energy policies,
      changes in supply and demand, pipeline pressures, damage to or destruction
      of
      pipelines and general economic conditions could adversely affect our ability
      to
      produce, gather and transport oil and natural gas.




*Competition
      in our industry is intense and many of our competitors have greater financial
      and technological resources.*




We
      operate in the competitive area of energy and alternative energy production.
      Many of our competitors are large, well-established companies that have larger
      operating staffs and significantly greater capital resources than we do.




*We
      are subject to complex laws and regulations that can adversely affect the cost,
      manner or feasibility of doing business.*




Exploration,
      development, production and sale of oil and gas are subject to extensive
      governmental and provincial laws and regulations, including complex
      environmental laws. We may be required to make large expenditures to comply
      with
      environmental and other governmental regulations. Failure to comply with these
      laws and regulations may result in the suspension or termination of our
      operations and subject us to administrative, civil and criminal penalties.
      Matters subject to regulation include discharge permits for drilling operations,
      drilling bonds, spacing of wells, unitization and pooling of properties,
      environmental protection, and taxation. Our operations create the risk of
      environmental liabilities to the government or third parties for any unlawful
      discharge of oil, gas or other pollutants into the air, soil or water. In the
      event of environmental violations, we may be charged with remedial costs.
      Pollution and similar environmental risks generally are not fully insurable.
      Such liabilities and costs could have a material adverse effect on our financial
      condition and results of operations.




*Competition
      for experienced, technical personnel may negatively impact our operations.*




Operations
      in the energy sector entail significant complexities and utilize advanced
      technologies requiring highly trained personnel. Our success will depend, in
      part, on our ability to attract and retain experienced professional personnel
      to
      manage our proposed alternative energy operations, as well as any direct energy
      production investments.


Page
          28




*Governmental
        actions and political instability may affect our results of
        operations.*





Our
      investments in the energy sector internationally would be subject to the
      regulatory authority of the U.S. and foreign governments and political
      interests, as well as political instability in foreign countries in which we
      invest. As a result, we would face risks of:




Ø
            changes
                in laws and regulations, import, export and use of products, environmental
                protection, climate change and energy security, all of which may
                increase
                costs or reduce the demand for our products;Ø
            expropriation
                of our assets and properties; andØ
            refusal
                to extend or grant, or delay in the extension or grant of, energy
                production or development
                contracts.




**ITEM
      2.**  **UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.**





Not
      applicable




**ITEM
      3.**  **DEFAULTS
      UPON SENIOR SECURITIES.**





Not
      applicable.




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





Not
      applicable.




**ITEM
      5.**  **OTHER
      INFORMATION.**




DISCLOSURE
      REGARDING FORWARD-LOOKING STATEMENTS




Throughout
      this report, we make statements that may be deemed "forward-looking" statements
      within the meaning of Section 27A of the Securities Act of 1933, as
      amended, and Section 21E of the Securities Exchange Act of 1934, as
      amended. All statements, other than statements of historical facts, that address
      activities, events, outcomes and other matters that Chancellor plans, expects,
      intends, assumes, believes, budgets, predicts, forecasts, projects, estimates
      or
      anticipates (and other similar expressions) will, should or may occur in the
      future are forward-looking statements. These forward-looking statements are
      based on management's current belief, based on currently available information,
      as to the outcome and timing of future events. When considering forward-looking
      statements, you should keep in mind the risk factors and other cautionary
      statements in this report.





We
      caution you that these forward-looking statements are subject to all of the
      risks and uncertainties, many of which are beyond our control, incident to
      the
      exploration for and development, production and sale of oil and gas. These
      risks
      include, but are not limited to, commodity price volatility, inflation, lack
      of
      availability of goods and services, environmental risks, operating risks,
      regulatory changes, the uncertainty inherent in estimating proved oil and
      natural gas reserves and in projecting future rates of production and timing
      of
      development expenditures and other risks described herein.





Through
      South American Hedge Fund, we plan to proceed with investments in oil and gas
      concessions in Argentina and intend to focus our investments in the energy
      sector, including alternative energy producing investments in Latin America
      and
      the United States. In August 2007, South American Hedge Fund signed the purchase
      option for three interests in oil and gas concessions in Argentina. We are
      in
      the process of obtaining the necessary government and environmental operating
      permits for our operation of the concessions. Our primary focus will be, upon
      completion of governmental approvals relative to our investment in these
      concessions, to develop operating wells on these properties over the
      near term.




Page
          29




Industry
        and economic factors




In
      managing our business in the oil and gas production sector we must deal with
      many factors inherent in our industry. First and foremost is wide fluctuation
      of
      oil and gas prices. Oil and gas markets are cyclical and volatile, with future
      price movements difficult to predict. While our revenues are a function of
      both
      production and prices, wide swings in prices often have the greatest impact
      on
      our results of operations.




Our
      operations entail significant complexities. Advanced technologies requiring
      highly trained personnel are utilized in restoration of wells and production.
      The oil and gas industry is highly competitive. We compete with major and
      diversified energy companies, independent oil and gas companies, and individual
      operators. In addition, the industry as a whole competes with other businesses
      that supply energy to industrial, commercial, and residential end users.




Approach
      to our business




Implementation
      of our business approach relies on our ability to fund ongoing development
      projects with cash flow provided by operating activities and external sources
      of
      capital.




Critical
      accounting policies and estimates




The
      process of estimating quantities of oil and gas reserves is complex, requiring
      significant decisions in the evaluation of all available geological,
      geophysical, engineering and economic data. The data for a given field may
      also
      change substantially over time as a result of numerous factors including, but
      not limited to, additional development activity, evolving production history
      and
      continual reassessment of the viability of production under varying economic
      conditions. As a result, material revisions to existing reserve estimates may
      occur from time to time. Although every reasonable effort is made to ensure
      that
      reserve estimates reported represent the most accurate assessments possible,
      the
      subjective decisions and variances in available data for various fields make
      these estimates generally less precise than other estimates included in the
      financial statement disclosures.




**ITEM
      6. EXHIBITS.**




10.38
            6%
                promissory note issued April 15, 2008 by Delta Mutual, Inc. to Security
                Systems International, Inc. in the principal amount of
                $20,000.10.39
            6%
                promissory note issued April 28, 2008 by Delta Mutual, Inc. to Egani,
                Inc.
                in the principal amount of $9,550.10.40
            6%
                promissory note issued May 14, 2008 by Delta Mutual, Inc. to Security
                Systems International, Inc. in the principal amount of
                $16,900.31.1
            Certification
                of Chief Executive Officer Pursuant to Section 302 of The Sarbanes
                Oxley
                Act of 2002.31.2
            Certification
                of Chief Financial Officer Pursuant to Section 302 of The Sarbanes
                Oxley
                Act of 2002.32.1
            Certification
                of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Oxley Act of
                2002.32.2
            Certification
                of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 asadopted
                pursuant to Section 906 of the Sarbanes-Oxley Oxley Act of
                2002.




Page
          30




SIGNATURES




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




DELTA
                MUTUAL, INC.BY:
            /s/
                Peter F. RussoPeter
                F. RussoPresident
                and ChiefExecutive
                Officer




Dated:
      July 3, 2008




EXHIBIT
      INDEX




10.38
            6%
                promissory note issued April 15, 2008 by Delta Mutual, Inc. to Security
                Systems International,
                Inc. in the principal amount of $20,000, filed
                herewith.10.39
            6%
                promissory note issued April 28, 2008 by Delta Mutual, Inc. to Egani,
                Inc.
                in the principal amount of $9,550, filed herewith.10.40
            6%
                promissory note issued May 14, 2008 by Delta Mutual, Inc. to Security
                Systems International, Inc. in the principal amount of $16,900, filed
                herewith.31.1
            Certification
                of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002, filed herewith.31.2
            Certification
                of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002, filed herewith.32.1
            Certification
                of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as
                Adopted
                Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed
                herewith.32.2
            Certification
                of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as
                Adopted
                Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed
                herewith.




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