Delta Systems' Arkansas Subsidiary Files for Chapter 11 Bankruptcy Protection



    /NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION BY
    ANY MEANS INTO THE UNITED STATES/

    TORONTO, Oct. 1 /CNW/ - Today Delta Systems, Inc., a corporation
incorporated under the laws of Canada ("Delta Canada" or the "Company"),
announced that its wholly owned subsidiary Delta Systems Inc., a corporation
organized under the laws of the State of Arkansas ("Delta Arkansas"), and
certain of its subsidiaries (Delta Arkansas, together with certain of its
subsidiaries, are collectively referred to as "Delta") are filing for Chapter
11 bankruptcy protection. The action to file for Chapter 11 bankruptcy
protection is being taken by Delta in the best interest of the Delta
stakeholders.
    As previously announced, in the third quarter of this year, Delta's order
inflow has been significantly below expectations in spite of normal project
quote flow and an active quote portfolio of $37 million. Delta management had
expected orders to strengthen in September and for the rest of 2007. An order
in excess of $1 million was expected by early September 2007. While Delta
management was informed by its customer that Delta was selected as the
supplier, it was also advised that the placing of the order would be delayed
until November 2007. Another significant potential order totaling up to
$2 million had a scope revision reducing the size of the potential order to
below $1 million. The date on which the customer may place this potential
order is also undetermined. There have also been delays in the receipt of
other smaller yet significant orders. These delays in major order inflow have
had a significant negative impact on Delta's financial condition and future.
Delta has implemented a reduction in work force headcount from approximately
60 employees to less than 30.
    During 2007, Delta Canada raised over $3 million of new capital which was
invested in Delta. Over $1 million of this new capital was provided by
insiders of the Company by way of investments in common shares and secured and
unsecured debt. Given Delta's current financial condition and business
circumstances, management of the Company does not believe that additional new
capital will be available to it for investment in Delta in the near term.
    As previously announced, management of the Company has been exploring
strategic alternatives since the spring of this year and has had discussions
with a number of interested parties. The Company retained a Toronto based
investment dealer to assist with this process. To date, no offers or proposals
have been made and management has concluded that no transaction is likely to
take place in the immediate future.
    Apart from its Delta Arkansas common shares, Delta Canada has no
significant assets. Delta Canada does not expect to receive any proceeds or
income from the bankruptcy proceedings of Delta in light of the significant
amounts that are owed to secured and unsecured creditors of Delta. All of the
independent directors of the Company have resigned.

    All dollar amounts are reported in U.S. dollars.

    The TSX Venture Exchange has neither approved nor disapproved of the
    information contained in this news release.

    Not for distribution to U.S. newswire services.

    Caution concerning forward-looking statements

    Certain statements contained in this news release may constitute "forward
looking statements". When used in this news release, the words "may," "would,"
"could," "will," "intend," "plan," "anticipate," "believe," "estimate,"
"expect," and similar expressions, as they relate to Delta Systems or its
management are intended to identify forward-looking statements. Such
statements reflect Delta Systems' current views with respect to future events
and are subject to certain risks, uncertainties and assumptions. Many factors
could cause the Company's actual results, performance or achievements to be
materially different from any future results, performance or achievements that
may be expressed or implied by such forward looking statements, including
among other things, those which are discussed under the headings "Risk
Factors" and elsewhere in documents that Delta Systems files from time to time
with securities regulatory authorities. Should one or more of these risks or
uncertainties materialize, or should assumptions underlying the
forward-looking statements prove incorrect, actual results may vary materially
from those described herein as intended, planned, anticipated, believed,
estimated or expected. Delta Systems does not intend, and does not assume any
obligation, to update these forward-looking statements.





For further information:

For further information: Jake Bushey, Delta Systems, Inc., (479)
619-2585, jbushey@delta-systems-inc.com

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DELTA SYSTEMS, INC.

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