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 September 30, 2002

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

For the transition period from ____________ to _________________

Commission File Number 000-30563

DELTA MUTUAL, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 14-1818394
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

6723 WHITTIER AVENUE, SUITE 203, MCLEAN, VA 22101
(703) 918-0350
(Address and telephone number, including area code, of
registrant's principal executive office)

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

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

YES X NO
--- ---

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

At November 1, 2002, there were 55,700 shares of Common Stock, $.0001 par
value, outstanding.

DELTA MUTUAL, INC.

INDEX
-----

Page
----

Part I. Financial Information 1

Item 1 Financial Statements

Balance Sheets as of September 30,
2002 (unaudited) and December 31, 2001 2

Statements of Operations for the Nine Months and
Three Months Ended September 30, 2002 and 2001
(unaudited) and the Period November 17, 1999 (Date
of Formation) through September 30, 2002 3

Statements of Cash Flows for the Nine Months Ended September
30, 2002 and 2001 (unaudited) and the Period November 17,
1999 (Date of Formation) through September 30, 2002 4 - 5

Notes to Financial Statements (unaudited) 6 - 12

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

Item 14 Controls and Procedures 19

Part II. Other Information

Item 1 Legal Proceedings 20
Item 2 Changes in Securities 20
Item 3 Defaults upon Senior Securities 20
Item 4 Submission of Matters to a Vote of Security Holders 20
Item 5 Other Information 20
Item 6 Exhibits and Reports on Form 8-K 20
Signatures 21

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Certain information and footnote disclosures required under
generally accepted accounting principles in the United States of
America have been condensed or omitted from the following financial
statements pursuant to the rules and regulations of the Securities and
Exchange Commission. It is suggested that the following financial
statements be read in conjunction with the year-end financial
statements and notes thereto included in the Company's Annual Report on
Form 10-KSB for the year ended December 31, 2001.

The results of operations for the three and nine months ended
September 30, 2002, are not necessarily indicative of the results to be
expected for the entire fiscal year or for any other period.

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

ASSETS
------

September 30, December 31,
2002 2001
------------- -------------
(Unaudited)

Current Assets:
Cash $ 31 $ 36,641
Note receivable (less allowance of $96,625
at September 30, 2002) -- 60,000
Prepaid expenses -- 23,000
--------- ---------
Total Current Assets 31 119,641

Other assets -- 30,000
--------- ---------
TOTAL ASSETS $ 31 $ 149,641
========= =========

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
----------------------------------------

Current Liabilities:
Convertible debt $ -- $ 250,000
Loan from stockholders 24,348 --
Accounts payable and accrued expenses 84,417 65,870
--------- ---------
Total Current Liabilities 108,765 315,870
--------- ---------
Commitments and Contingencies

Stockholders' Deficiency:
Common stock $0.0001 par value - authorized
20,000,000 shares; 55,700
shares issued and outstanding 6 6
Additional paid-in-capital 256,902 48,272
Deficit accumulated during
the development stage (365,642) (214,507)
--------- ---------
Total Stockholders' Deficiency (108,734) (166,229)
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIENCY $ 31 $ 149,641
========= =========

See notes to financial statements.

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

Period from
November 17, 1999
Nine Months Ended September 30, Three Months Ended September 30, (Date of Formation)
------------------------------- -------------------------------- through
2002 2001 2002 2001 September 30, 2002
---------- ---------- ---------- -------- ------------------

Costs and Expenses
General and administrative
expenses $ 151,135 $ 54,513 $ 2,134 $ 28,721 $ 365,642
--------- --------- --------- --------- ---------
Net loss $(151,135) $ (54,513) $ (2,134) $ (28,721) $(365,642)
--------- --------- --------- --------- ---------
Loss per common share -
basic and diluted $ (2.71) $ (0.98) $ (0.04) $ (0.52)
========= ========= ========= =========
Weighted average number of
common shares outstanding-
basic and diluted 55,700 55,700 55,700 55,700
========= ========= ========= =========

See notes to financial statements.

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

Period
November 17, 1999
Nine Months Ended September 30, (Date of Formation)
------------------------------- through
2002 2001 September 30, 2002
----------- ------------ ------------------

Cash flows from operating activities:
Net loss $(151,135) $ (54,513) $(365,642)
Reserve for bad debt on
note receivable 96,625 -- 96,625
Changes in operating assets
and liabilities: 23,552 (21,229) 36,422
--------- --------- ---------
Net cash used in operating activities: (30,958) (75,742) (232,595)
--------- --------- ---------
Cash flows from investing activities:
Advances (30,000) -- (90,000)
--------- --------- ---------
Cash flows from financing activities:
Proceeds from sale of common stock -- -- 10,750
Proceeds from loan -- 494,414 540,744
Repayment of loan -- (440,000) (540,744)
Proceeds from convertible debt -- -- 250,000
Proceeds from stockholder 24,348 32,578 61,876
--------- --------- ---------
Net cash provided by
financing activities 24,348 86,992 322,626
--------- --------- ---------
Net increase (decrease) in cash (36,610) 11,250 31

Cash - Beginning of year 36,641 421 --
--------- --------- ---------
Cash - Ending of year $ 31 $ 11,671 $ 31
========= ========= =========

See notes to financial statements.

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

Period
November 17, 1999
Nine Months Ended September 30, (Date of Formation)
-------------------------------- through
2002 2001 September 30, 2002
---------- ----------- --------------------

Non-cash financing activities:
Conversion of debt to paid-in-capital $ 958,630 $ -- $ 958,630
========= ========== =========
Conversion of note receivable to
paid-in-capital $(750,000) $ -- $(750,000)
========= ========== =========
Forgiveness of debt to former
shareholder $ -- $ -- $ 37,528
========= ========== =========
Supplementary information:
Cash paid during year for:
Interest $ -- $ --
========= ========== =========
Income taxes $ -- $ --
========= ========== =========
Changes in operating assets and liabilities
consists of:
Increase in interest receivable $ (6,625) $ -- $ (6,625)
Decrease in prepaid expenses 8,000 -- (15,000)
Decrease in other assets -- -- (30,000)
Increase in accounts payable
and accrued expenses 22,177 (21,229) 88,047
--------- ---------- ---------
$ 23,552 $ (21,229) $ 36,422
========= ========== =========

See notes to financial statements.

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

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES

ORGANIZATION
- ------------

The Company was incorporated under the name Delta Mutual, Inc. on November
17, 1999 in the State of Delaware. The Company has not commenced operations and
no revenues have been derived since its formation. Accordingly, the Company is
considered a development stage enterprise. The Company originally intended to
provide mortgage services through the Internet to the "sub-prime" market, but no
longer pursues that business plan.

On May 11, 2001 the Company entered into an agreement of sale with
Enterprise Solutions, Inc. ("ESI"). Pursuant to that agreement, the Company was
to acquire substantially all of the assets of ESI in exchange for approximately
10,500,000 shares of the Company's common stock. ESI was organized to develop
and sell high assurance security computer networks and related products and
services to both government agencies and commercial enterprises. ESI was in the
development stage and had no revenues of a continuing nature.

Incident to such agreement, the Company was granted an exclusive world-wide
license by ESI to make, use and sell their technology, hardware and software
products.

The merger agreement and the licensing agreement were both terminated on
April 16, 2002. See Note 2 of Notes to Financial Statements.

On July 9, 2002 the Company entered into a proposed merger agreement with
Helvetia Pharmaceuticals, Inc. ("Helvetia"), a Delaware corporation. Helvetia is
a pharmaceutical company that focuses on a variety of treatment-resistant
centers, such as hormone-resistant prostate and pancreatic cancer, liver cancer
and ovarian cancer, utilizing intracellular hypothermia therapy, a unique
methodology coupled with proprietary agents. Helvetia operates facilities in the
United States and Europe. The merger was terminated on November 6, 2002.

BASIS OF PRESENTATION
- ---------------------

The balance sheet as of September 30, 2002 and the 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 balance sheet as of December
31, 2001 was derived from audited financial statements.

The Company's financial statements for the nine months ended September 30,
2002 have been prepared on a going concern basis which contemplates the
realization of assets and settlement of liabilities and commitments in the
normal course of business. Management recognizes that the Company's continued
existence is dependent upon its ability to obtain needed working capital through
additional equity and/or debt financing and the commencement of its planned
principal operations.

The Company's business is subject to most of the risks inherent in the
establishment of a new business enterprise. The likelihood of success of the
Company must be considered in light of the expenses, difficulties, delays and
unanticipated challenges encountered in connection with the formation of a new
business, raising operating and development capital, and the marketing of a new
product.

The Company presently does not have sufficient liquid assets to finance its
anticipated funding needs and obligations. The Company recently terminated its
merger agreement and license agreement with ESI. The Company's continued
existence is dependent upon its ability to obtain needed working capital through
additional equity and/or debt financing. Management is actively seeking
additional capital to ensure the continuation of its operations. However, there
is no assurance that additional capital will be obtained. It remains the
Company's intention to enter into a merger or acquire the assets of another
business. On July 9, 2002 the Company entered into a proposed merger with
Helvetia, a pharmaceutical company. The merger was subject to due diligence by
both parties. As a result of information discovered during due diligence, the
parties cancelled the proposed merger on November 6, 2002. These events and
uncertainties raise substantial doubt about the ability of the Company to
continue as a gong concern.

The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classifications of liabilities that might be necessary should the Company be
unable to continue as a going concern.

LOSS PER SHARE
- --------------

Basic loss per common share is computed by dividing net loss by the
weighted average number of common shares outstanding during the year. Diluted
earnings (loss) per common share are computed by dividing net earnings by the
weighted average number of common and potential common shares 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.

RECENT ACCOUNTING PRONOUNCEMENTS
- --------------------------------

On June 29, 2001, the Financial Accounting Standards Board (FASB)
issued SFAS No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and
Intangible Assets." The major provisions of SFAS No. 141 were as follows: all
business combinations initiated after June 30, 2001 must use the purchase method
of accounting; the pooling of interest method of accounting is prohibited. SFAS
No. 142 eliminated the amortization of goodwill and other intangibles and
requires an impairment test of their carrying value. An initial impairment test
of goodwill and other intangibles must be completed in the year of adoption with
at least an annual impairment test thereafter. On January 1, 2002, the Company
adopted SFAS No. 142. The adoption of SFAS No. 142 did not have a material
impact on the Company's results of operations or financial position.

In August 2001, the FASB issued SFAS No. 143 "Accounting for Asset
Retirement Obligations". SFAS No. 143 addresses financial accounting and
reporting for obligations and costs associated with the retirement of tangible
long-lived assets. The Company is required to implement SFAS No. 143 on January
1, 2003. Management believes the effect of implementing this pronouncement will
not have a material impact on the Company's results of operations or financial
position.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets", effective for fiscal years
beginning after December 15, 2001. Under SFAS No. 144 assets held for sale will
be included in discontinued operations if the operations and cash flows will be
or have been eliminated from the ongoing operations of the entity and the entity
will not have any significant continuing involvement in the operations of the
component. The Company adopted SFAS No. 144 on January 1, 2002. The adoption of
SFAS No. 144 did not have a material impact on the Company's results of
operations or financial position.

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

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." This Statement requires recording costs
associated with exit or disposal activities at their fair values when a
liability has been incurred. Under previous guidance, certain exit costs were
accrued upon management's commitment to an exit plan. Adoption of this Statement
is required with the beginning of fiscal year 2003. The Company has not yet
completed the evaluation of the impact of adopting this Statement.

On October 1, 2002, the FASB issued SFAS No. 147, "Acquisitions of
Certain Financial Institutions." SFAS No. 147 removes acquisitions of financial
institutions from the scope of FASB Statement No. 72, "Accounting for Certain
Acquisitions of Banking or Thrift Institutions", and FASB Interpretation No. 9,
"Applying APB Opinion Nos. 16 and 17 When a Savings and Loan Association or a
Similar Institution is Acquired in a Business Combination Accounted for by the
Purchase Method," and requires that those transactions be accounted for in
accordance with FASB Statements Nos. 141 and 142.

Additionally, this Statement amends FASB Statement No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets," to include in its scope
long-term customer-relationship intangible assets of financial institutions such
as depositor and borrower relationship intangible assets and credit cardholder
intangible assets. Consequently, those intangible assets are subject to the same
undiscounted cash flow recoverability test and impairment loss recognition and
measurement provisions that Statement 144 requires for other long-lived assets
that are held and used.

This statement became effective on October 1, 2002 and did not have a material
impact on the Company's results of operations or financial position.

2. AGREEMENT OF SALE

In May 2001, Delta and ESI entered into an agreement whereby ESI was to
sell its assets to Delta for 1.2676 newly issued Delta common shares for each
common share of ESI outstanding. In June 2001, the Company prepared and filed
with the Securities and Exchange Commission a registration statement for the
shares to be issued to ESI's stockholders, with a view to consummating the
acquisition. In the fall of 2001, the Company loaned ESI substantial monies. See
Note 4 of Notes to Financial Statements.

On October 21, 2001, ESI's president died leaving ESI without a chief
executive. ESI was without sufficient funds to pay the professional and
accounting fees necessary for a closing, or to pay for marketing its products.
The Company therefore determined not to expend additional funds on such
acquisition and to look for an alternative business to acquire or with which to
merge. In light of such changed circumstances, ESI's lack of funds with which to
pay the costs necessary to close on the transaction, and the Securities and
Exchange Commission's comments with respect to the party's registration
statement, the Company views the Agreement of Sale as terminated and has
suspended all activities to implement such acquisition. The Company has
withdrawn its registration statement.

On April 16, 2002, a termination of the merger agreement was signed because
the registration statement required to be filed with the Securities and Exchange
Commission for the acquisition and approval by stockholders of ESI did not take
place.

As part of the termination agreement, the Company received a note by John
Solomon in favor of ESI in the amount of $750,000. The Company transferred
ownership to ESI approximately 35 TAD Devices and 1 NRE and cancelled its
license agreement with ESI to make, use and sell any ESI technology and products
and each company released the other from any and all liability related to and
arising under the merger agreement. The Company transferred the $750,000 note it
received from ESI to the holder of the Company's $250,000 convertible note in
satisfaction of the convertible note.

3. NOTES RECEIVABLE

The Company entered into an agreement with ESI whereby the Company would
advance to ESI up to $100,000. ESI agreed to pay the entire amount advanced,
including interest at a rate of 10% per annum, on or before June 30, 2002. At
the Company's option, the Company may convert the unpaid principal balance of
the note, together with accrued interest, into that number of shares of stock of
ESI at the conversion price of $.20 per common share, or the existing market
price, whichever is greater, anytime prior to maturity. As of September 30, 2002
the Company advanced ESI $90,000. Interest receivable at September 30, 2002 was
$6,625 which was fully reserved against the debt.

The note receivable is secured by the assets of ESI. The assets of ESI
include a judgement ESI obtained against Herbert Cannon in the amount of $2.2
million. Approximately $2.4 million belonging to Herbert Cannon is held by Court
order and by the District Court for the Southern District of New York. ESI has
filed a claim against those funds to recover on its judgement. Therefore,
sufficient assets exist to enable ESI to satisfy its debt to the Company. In
addition to ESI the Securities and Exchange Commission obtained a $1.1 million
judgement against Cannon and has likewise asserted a claim to the approximate
$2.4 million frozen and held by the Court. Also the Justice Department has filed
an action in the Southern District of New York seeking forfeiture of the entire
$2.4 million amount. The Company believes the collectability of this debt is
questionable. As of September 30, 2002 the Company has fully reserved against
the debt.

4. CONVERTIBLE DEBT PAYABLE

On November 27, 2001 the Company borrowed $250,000 from Roseann Solomon
(John Solomon's widow) for which it issued a 10% convertible promissory note due
on or before December 31, 2002. Interest expense in the amount of $1,333, $2,379
and $3,612 was accrued at March 31, 2002, December 31, 2001 and the period
November 17, 1999 (Date of Formation) through March 31, 2002, respectively.

At any time prior to maturity or prior to payment in full, the Note holder
had the right to convert the unpaid portion of the note, together with accrued
interest, into that number of shares of common stock of the Company at the then
current market price per share and the Company and the Note holder each had the
right to offset the unpaid principal balance of the note, together with accrued
interest, for a certain promissory note dated May 31, 2001 between ESI and John
A. Solomon.

As part of the termination agreement with ESI, the Company received the
John Solomon note, which it assigned to Roseann Solomon in complete satisfaction
of its $250,000 obligation to her.

5. COMMON STOCK

The Company has a single class of Common Stock with a par value of $0.0001
per share. There are 20 million shares authorized, and at December 31, 2001 and
2000, respectively, 557,000 shares were issued and outstanding. The former
president of the Company purchased 300,000 shares in November of 1999.

Such shares were issued without registration in reliance on an exemption in
federal securities laws that permit issuance of stock up to $1 million without
registration of the securities.

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

6. COMMITMENTS AND CONTINGENCIES

License Agreement
- -----------------

On April 16, 2002 the Company terminated its license agreement with ESI.

MARKETING SERVICES AGREEMENT
- ----------------------------

Effective November 1, 2001 ESI entered into a marketing services agreement
with KCT Inc. ("KCT"). KCT was to provide consulting services to the Company for
a minimum period of 120 days. The monthly fee was $15,000 for the first sixty
days and $19,000 for the remaining sixty days.

During the first quarter of 2002 the agreement was orally terminated and
the Company believes it has no obligation in connection with the agreement.

INVESTOR RELATIONS AGREEMENT
- ----------------------------

On November 6, 2001 the Company entered into an agreement with Direct
Development Group, LLC ("Direct"). Direct was to assist the Company, for a
period of four months, as its investor relations and strategic communication
consultant. Direct received a fee of $16,000.

7. PROPOSED ACQUISITION

On July 9, 2002 the Company entered into a proposed merger agreement with
Helvetia, a pharmaceutical company with facilities in the United States and
Europe. As a condition precedent to the merger, the Company agreed to spin off
its current operations. The Company also committed to effect a reverse split of
its shares, reducing the outstanding common shares prior to the merger to 55,700
shares, which split the Company implemented. The Company was to issue Helvetia
8,843,548 common shares in exchange for 100% of the common shares of Helvetia.
The transaction was to be accounted for as a reverse merger. The merger however
was subject to due diligence by both parties. During due diligence the existence
of issues impacting the merger were disclosed by Helvetia. As a result of those
disclosures, the Company terminated the merger agreement on November 6, 2002.

Item 2. Management's Discussion and Plan of Operations

FORWARD LOOKING STATEMENTS
- --------------------------

Under the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995, the Company caution readers regarding forward looking
statements found in this report and in any other statement made by or on its
behalf. Forward looking statements are statements which are not based on
historical information and which relate to future operations, strategies,
financial results or other developments. Forward looking statements are
necessarily based upon estimates and assumptions that are inherently subject to
significant business, economic and competitive uncertainties and contingencies,
many of which are beyond the Company's control and many of which, with respect
to future business decisions, are subject to change. These uncertainties and
contingencies can affect actual results and could cause actual results to differ
materially from those expressed in any forward looking statements made by or on
the Company's behalf. The Company disclaims any obligation to update forward
looking statements.

GENERAL
- -------

Delta was incorporated under the laws of the State of Delaware on November
17, 1999. Delta is a development stage company which initially intended to
develop an Internet based mortgage services company. The Company was unable to
secure sufficient financing to implement its initial business plan. On July 9,
2002 the Company entered into a proposed merger agreement with Helvetia , a
pharmaceutical company. The Company terminated that agreement on November 6,
2002.

The Company has insufficient capital with which to commence operational
activities. The Company incurred, and will continue to incur, expense relating
to its operations. Specifically, as long as the Company is required to file
reports under the Securities Exchange Act, the Company will continue to incur
accounting and legal fees relating to its filings. The Company enjoys the
non-exclusive use of office, telecommunication and incidental supplies of
stationery, provided by its president. As of the date of this report, the
Company has not received any revenues and must rely entirely upon loans and
equity investments from affiliates to pay operating expenses.

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 judgements that effect the reported
amount of assets, liabilities, and expenses, and related disclosures of
contingent assets and liabilities. On an on-going basis, the Company evaluates
its estimates, including those related to intangible assets, income taxes and
contingencies and litigation. The Company bases its estimates on historical
experience and on various assumptions that are believed to be reasonable under
the circumstances, the results of which form the basis for making judgements
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.

The Company believes the following critical accounting policies affect its
more significant judgements and estimates used in the preparation of its
financial statements. The Company maintains allowances for doubtful accounts for
estimated losses resulting from the inability of ESI to make the required
payments on its note to the Company. The Company has fully reserved against this
debt.

PLAN OF OPERATION
- -----------------

The Company is currently dependent on loans and investments from affiliates
to pay its operating expenses. There are no assurances that such affiliates will
continue to advance funds or invest in the Company's securities. In the event
the Company is unable to obtain additional capital or funding the Company may be
unable to pursue its business plan or consummate its proposed merger. The
Company will need additional funding to effect such transaction. No other
significant cash or funds are expected to be required.

The Company intends to seek to acquire assets or shares of an entity
actively engaged in a business that generates revenues, in exchange for its
securities. The Company intends to contact investment bankers, corporate
financial analysts, attorneys and other investment industry professionals
through various media.

Prior to consummation of a proposed merger, the Company will provide its
stockholders with such disclosure documentation concerning the business
opportunity and the structure of the proposed business combination as is
required by law.

Due to the fact that the Company had no operations, it is anticipated that
its cash requirements will be limited, and that all necessary capital, to the
extent required, will be provided by its directors, officers and/or
stockholders. The Company does not anticipate that it will have to raise capital
or acquire any plant or significant equipment in the next twelve months unless
funds are needed to complete the proposed merger.

LIQUIDITY
- ---------

The Company has no current operations and have not generated any revenue.
The Company must rely entirely on loans from affiliates to pay operating
expenses.

At September 30, 2002 the Company's working capital deficit was
approximately $(109,000) and continued to operate at a loss. Since the Company
has no source of revenue, its working capital deficit will continue to increase
as it incurs additional operating expenses. Presently the Company has no
external sources of cash and the Company is dependent upon its management and
stockholders for funding.

In November 2001, the Company borrowed $250,000 from Rosanne Solomon, the
widow of Enterprise's former CEO. Such note was payable on or before December
31, 2002, with interest at 10%. Mrs. Solomon had the right to convert the
outstanding balance of such note into shares of Delta's common stock at the
market price per share on the date of conversion, and the Company had the right
to pay off such note by delivery to her of the $750,000 note made by her late
husband in consideration of cash advances by Enterprises. The Company did not
have sufficient funds to pay off Mrs. Solomon's note, and on April 15, 2002, the
Company acquired Mr. Solomon's note from Enterprises in exchange for assignment
to Enterprises of certain keypads acquired from Panasonic. The Company used Mr.
Solomon's note to pay off our $250,000 obligation to Mrs. Solomon.

The Company currently has a note receivable from ESI in the amount of
$90,000. The note receivable is secured by the assets of ESI. The assets of ESI
include a judgement ESI obtained against Herbert Cannon in the amount of $2.2
million. Approximately $2.4 million belonging to Herbert Cannon is held by Court
order and by the District Court for the Southern District of New York. ESI has
filed a claim against those funds to recover on its judgement. Therefore,
sufficient assets exist to enable ESI to satisfy its debt to the Company. In
addition to ESI the Securities and Exchange Commission obtained a $1.1 million
judgement against Cannon and has likewise asserted a claim to the approximate
$2.4 million frozen and held by the Court. Also the Justice Department has filed
an action in the Southern District of New York seeking forfeiture of the entire
$2.4 million amount. The Company believes the collectability of this debt is
questionable. As of September 30, 2002 the Company has fully reserved against
the debt.

The Company's ability to continue as a going concern is dependent upon our
ability to obtain funds to meet our obligations on a timely basis, to identify
and close an acquisition with a suitable target company, obtain additional
financing or refinancing as may be required, and ultimately to attain
profitability. There are no assurances that we will be able to identify a
suitable acquisition target and close such acquisition, obtain any additional
financing or, if we are able to obtain additional financing, that such financing
will be on terms favorable to us. The inability to obtain additional financing
when needed would have a material adverse effect on our operating results.

The Independent Auditors' Report and Note 1 of the Notes to Financial
Statements for the year ended December 31, 2001 state that substantial doubt has
been raised about the Company's ability to continue as a going concern. The
Company's present business operations do not generate any revenues with which to
cover its expenses. The Company will have to acquire or merge with other
business operations or severely reduce its expenses to remain viable and the
Company cannot assure you that it will be able to do so.

RESULTS OF OPERATIONS
- ---------------------

Nine months ended September 30, 2002 compared to
Nine months ended September 30, 2001
- ------------------------------------

During the nine months ended September 30, 2002 the Company incurred a net
loss of approximately $151,000. Such loss is primarily attributed to
professional expenses incurred in connection with the contemplated transaction
with Enterprises, including preparation of the registration statement and
information statement for the meeting of stockholders and a reserve for bad debt
against the note receivable from ESI in the amount of $96,625. During the nine
months ended September 30, 2001 the Company incurred a net loss of approximately
$54,500. From inception (November 17, 1999) to September 30, 2002 the Company
had a net loss of approximately $365,650. The Company is continuing to incur
professional fees and other expenses. If the Company does not find a suitable
acquisition target or other source of revenue, the Company will continue to
incur net losses and may have to cease operations entirely. This factor, among
others raises substantial doubt about the Company's ability to continue as a
going concern.

Three months ended September 30, 2002 compared to
Three months ended September 30, 2001
-------------------------------------

During the three months ended September 30, 2002 the Company incurred a net
loss of approximately $2,100. Such loss is primarily attributed to professional
expenses incurred in connection with the contemplated transaction with
Enterprises, including preparation of the registration statement and information
statement for the meeting of stockholders and a reserve for bad debt against the
note receivable from ESI in the amount of $90,000. During the three months ended
September 30, 2001 the Company incurred a net loss of approximately $28,700.

Other Matters
- -------------

New Accounting Pronouncements
- -----------------------------

This statement became effective on October 1, 2002 and did not have a
material impact on the Company's results of operations or financial position.

Item 14. Controls and Procedures

Within the 90 days prior to the date of this report, the Company
carried out an evaluation, under the supervision and with the participation of
the Company's management, including the Company's Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures pursuant to Exchange Act Rule
13a-14. 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 timely alerting them to material information
relating to the Company (including its consolidated subsidiaries) required to be
included in the Company's periodic SEC filings. There have been no significant
changes in the Company's internal controls or in other factors that could
significantly affect internal controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There are no legal proceedings against the Company and the
Company is unaware of such proceedings contemplated against it.

ITEM 2. CHANGES IN SECURITIES

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

Not applicable

Item 6. Exhibits and Reports on Form 8-K
--------------------------------

(a) Exhibits:

Exhibit 99.1 Certification of Chief Executive
Officer and Chief Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 99.2 Certification pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.

(b) There were no Current Reports on Form 8-K filed by
the registrant during the quarter ended September
30, 2002.

SIGNATURES

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

DELTA MUTUAL, INC.

BY: /s/ Kenneth Martin
----------------------
Kenneth Martin
Chief Financial Officer and
Chief Executive Officer

Dated: November 13, 2002