~~Table~~UNITED ofSTATES ~~Contents~~

~~UNITED~~SECURITIES ~~STATES~~AND EXCHANGE COMMISSION

~~SECURITIES~~WASHINGTON, ~~AND~~D.C. ~~EXCHANGE~~20549 ~~COMMISSION~~

~~WASHINGTON,~~FORM ~~D.C. 20549~~ 10-Q

~~FORM~~(Mark ~~10-Q~~ One)

~~(Mark~~x ~~One~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

xFor ~~QUARTERLY~~the ~~REPORT~~quarterly ~~PURSUANT~~period TOended ~~SECTION~~June 27, 132015 ~~OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~For~~OR ~~the quarterly period ended March 28, 2015~~

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

¨For ~~TRANSITION~~the ~~REPORT~~transition ~~PURSUANT~~period ~~TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~from to

~~For~~Commission ~~the~~file ~~transition~~number ~~period~~000-05388 ~~from to~~

~~Commission~~DEER ~~file~~VALLEY CORPORATION ~~number 000-05388~~

~~DEER~~(Exact ~~VALLEY CORPORATION~~name of Registrant as specified in its charter)

(Exact name of Registrant as specified in its charter)


Florida		20-5256635
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification no.)

205 Carriage Street, Guin, AL		35570
(Address of principal executive offices)		(Zip code)

Florida		20-5256635
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification no.)

Registrant’s telephone number, including area code: (205) 468-8400

205 Carriage Street, Guin, AL		35570
(Address of principal executive offices)		(Zip code)

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 ¨

~~Registrant’s~~Indicate ~~telephone~~by ~~number~~check mark whether the registrant has submitted electronically and posted on its corporate Web site, ~~including~~if ~~area~~any, ~~code:~~every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (~~205~~232.405 of this chapter) ~~468-8400~~ during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant ~~(1) has~~is ~~filed~~a ~~all~~large ~~reports~~accelerated ~~required~~filer, toa benon-accelerated ~~filed~~filer ~~by Section 13~~ or ~~15(d)~~a ofsmaller ~~the~~reporting ~~Securities~~company. ~~Exchange~~See ~~Act of 1934 during~~ the ~~preceding~~definitions 12of ~~months~~“large ~~(or~~accelerated ~~for~~filer,” ~~such~~“accelerated ~~shorter~~filer” ~~period~~and ~~that~~“smaller ~~the~~reporting ~~Registrant~~company” ~~was~~in ~~required~~Rule ~~to file such reports) and (~~12b-2~~) has~~ ~~been~~of ~~subject to such filing requirements for~~ the Exchange ~~past~~Act. 90(Check ~~days. Yes x No ¨~~one):

~~Indicate~~Large byaccelerated ~~check mark~~filer ~~whether~~¨ ~~the~~Accelerated ~~registrant~~Filer ~~has~~¨ ~~submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S~~Non-Taccelerated ~~(232.405~~filer of¨ ~~this~~Smaller ~~chapter)~~reporting ~~during~~company ~~the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes~~ x ~~No ¨~~

Indicate by check mark whether the registrant is a ~~large~~shell ~~accelerated filer, a non-accelerated filer or a smaller reporting~~ company. ~~See~~(as ~~the~~defined ~~definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company”~~ in Rule 12b-2 of the Exchange Act). Yes ¨ No x ~~(Check one):~~

~~Large~~The ~~accelerated~~Registrant ~~filer~~had ¨15,514,344 ~~Accelerated~~shares ~~filer~~of ¨Common ~~Non-accelerated~~Stock, ~~filer~~par ¨value ~~Smaller~~$0.001 ~~reporting~~per ~~company~~share, xoutstanding as of August 1, 2015.

~~Indicate~~TABLE byOF ~~check~~CONTENTS ~~mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x~~

The Registrant had 15,514,344 shares of Common Stock, par value $0.001 per share, outstanding as of May 1, 2015.


		PAGE
PART I	FINANCIAL INFORMATION

Item 1	Financial Statements

	Condensed Consolidated Balance Sheets
	As of June 27, 2015 (unaudited)
	As of December 27, 2014		F-2

	Condensed Consolidated Statements of Operations
	Three and Six Months ended June 27, 2015 (unaudited)
	Three and Six Months ended June 28, 2014 (unaudited)		F-3

	Condensed Consolidated Statements of Cash Flows
	Six Months ended June 27, 2015 (unaudited)
	Six Months ended June 28, 2014 (unaudited)		F-4

	Notes to Condensed Consolidated Financial Statements (unaudited)		F-5– F-10

Item 2	Management’s Discussion and Analysis		1

Item 4T	Controls and Procedures		7

PART II	OTHER INFORMATION

Item 1	Legal Proceedings		8

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds		8

Item 3	Defaults Upon Senior Securities		8

Item 4	Mine Safety Disclosures		8

Item 5	Exhibits		9

~~Table~~Unless ofotherwise ~~Contents~~indicated or the context otherwise requires, all references in this filing to “we,” “us,” the “Company,” and “Deer Valley” are to Deer Valley Corporation, a Florida corporation, together with its wholly-owned subsidiaries, Deer Valley Homebuilders, Inc., an Alabama corporation, Deer Valley Finance Corp., a Florida corporation, and Deer Valley Home Repair Services, Inc., a Florida corporation.

~~TABLE~~Item OF1. ~~CONTENTS~~Financial Statements

		PAGE
PART I	FINANCIAL INFORMATION
Item 1	Financial Statements
	Condensed Consolidated Balance SheetsAs of March 28, 2015 (unaudited)As of December 27, 2014		F-2
	Condensed Consolidated Statements of OperationsThree Months ended March 28, 2015 (unaudited)Three Months ended March 29, 2014 (unaudited)		F-3
	Condensed Consolidated Statements of Cash FlowsThree Months ended March 28, 2015 (unaudited)Three Months ended March 29, 2014 (unaudited)		F-4
	Notes to Condensed Consolidated Financial Statements (unaudited)		F-5– F-10
Item 2	Management’s Discussion and Analysis		1
Item 4T	Controls and Procedures		7
PART II	OTHER INFORMATION
Item 1	Legal Proceedings		8
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds		8
Item 3	Defaults Upon Senior Securities		8
Item 4	Mine Safety Disclosures		8
Item 5	Exhibits		9

Deer Valley Corporation & Subsidiaries

~~Unless~~Condensed ~~otherwise~~Consolidated ~~indicated~~Financial orStatements the context otherwise requires, all references in this filing to “we,” “us,” the “Company,” and “Deer Valley” are to Deer Valley Corporation, a Florida corporation, together with its wholly-owned subsidiaries, Deer Valley Homebuilders, Inc., an Alabama corporation, Deer Valley Finance Corp., a Florida corporation, and Deer Valley Home Repair Services, Inc., a Florida corporation.


Contents:

Condensed Consolidated Balance Sheets as of June 27, 2015 (unaudited) and December 27, 2014			F-2

Condensed Consolidated Statements of Operations for the Three and Six Month Periods Ended June 27, 2015 (unaudited) and June 28, 2014 (unaudited)			F-3

Condensed Consolidated Statements of Cash Flows for the Six Month Period Ended June 27, 2015 (unaudited) and June 28, 2014 (unaudited)			F-4

Notes to Condensed Consolidated Financial Statements (unaudited)			F-5 - F-10

~~PART~~F-1 ~~I FINANCIAL INFORMATION~~

~~Item~~Deer 1.Valley ~~Financial~~Corporation ~~Statements~~& Subsidiaries

~~Deer~~Condensed ~~Valley~~Consolidated ~~Corporation &~~Balance ~~Subsidiaries~~Sheets

Condensed Consolidated Financial Statements


	June 27, 2015			December 27, 2014
	(unaudited)
ASSETS
Current Assets:
Cash	$	3,662,063		$	4,116,101
Accounts receivable, net		1,741,522			1,577,111
Inventory		1,621,293			1,233,480
Deferred tax asset		618,006			578,928
Inventory finance notes receivable		2,528,354			2,081,511
Prepaid expenses and other current assets		167,905			67,532

Total Current Assets		10,339,143			9,654,663

Fixed Assets:
Property, plant and equipment, net		2,378,398			2,307,495

Other Assets:
Inventory finance notes receivable, net		1,759,155			1,443,294
Deferred tax asset		1,353,394			1,439,538
Other assets		12,838			14,386

Total Other Assets		3,125,387			2,897,218

Total Assets	$	15,842,928		$	14,859,376

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:
Current maturities on long term debt	$	753,600		$	125,600
Accounts payable		526,439			327,775
Accrued expenses		1,947,957			1,790,432
Accrued warranties		1,335,000			1,245,000
Income tax payable		196,412			165,877

Total Current Liabilities		4,759,408			3,654,684

Long Term Liabilities:
Long-term debt, net of current maturities		—			690,800

Total Long Term Liabilities		—			690,800

Total Liabilities		4,759,408			4,345,484

Stockholders’ Equity:

Common stock, $0.001 par value, 100,000,000 shares authorized, 17,912,184 and 17,912,184 shares issued and 15,514,344 and 15,514,344 outstanding, respectively		17,914			17,914

Additional paid-in capital		33,336,067			33,336,067

Treasury Stock, at cost; 2,397,840 and 2,397,840 shares, respectively		(1,305,378	)		(1,305,378	)

Accumulated deficit		(20,965,083	)		(21,534,711	)

Total Stockholders’ Equity		11,083,520			10,513,892

Total Liabilities and Stockholders’ Equity	$	15,842,928		$	14,859,376

Contents:
Condensed Consolidated Balance Sheets as of March 28, 2015 (unaudited) and December 27, 2014			F-2
Condensed Consolidated Statements of Operations for the Three Month Period Ended March 28, 2015 (unaudited) and March 29, 2014 (unaudited)			F-3
Condensed Consolidated Statements of Cash Flows for the Three Month Period Ended March 28, 2015 (unaudited) and March 29, 2014 (unaudited)			F-4
Notes to Condensed Consolidated Financial Statements (unaudited)			F-5 - F-10

See notes to condensed consolidated financial statements (unaudited)

F-12

~~Table~~Deer ofValley ~~Contents~~Corporation & Subsidiaries

~~Deer~~Condensed ~~Valley~~Consolidated ~~Corporation & Subsidiaries~~Statements of Operations

Consolidated Balance Sheets


	For The Three Month Period Ended						For The Six Month Period Ended
	June 27, 2015			June 28, 2014			June 27, 2015			June 28, 2014
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
REVENUE	$	9,516,921		$	7,919,232		$	15,830,299		$	13,116,303

COST OF REVENUE		7,345,704			6,400,421			12,538,695			10,927,236

GROSS PROFIT		2,171,217			1,518,811			3,291,604			2,189,067

OPERATING EXPENSES:
Selling, general and administrative		1,295,943			1,024,460			2,435,343			2,226,086

TOTAL OPERATING EXPENSES		1,295,943			1,024,460			2,435,343			2,226,086

OPERATING INCOME/(LOSS)		875,274			494,351			856,261			(37,019	)

OTHER INCOME (EXPENSES)
Interest income		4			120			9			240
Other income (expense)		8,500			—			9,500			2,200
Interest expense		(8,208	)		(9,555	)		(16,654	)		(19,338	)

TOTAL OTHER INCOME/(EXPENSES)		296			(9,435	)		(7,145	)		(16,898	)

INCOME/(LOSS) BEFORE INCOME TAXES		875,570			484,916			849,116			(53,917	)

INCOME TAX (EXPENSE)/BENEFIT		(280,980	)		(188,658	)		(279,488	)		8,432

NET INCOME/(LOSS)	$	594,590		$	296,258		$	569,628		$	(45,485	)

Net Income/(Loss) Per Share (Basic)	$	0.04		$	0.02		$	0.04		$	(0.00	)
Net Income/(Loss) Per Share (Fully Diluted)	$	0.04		$	0.02		$	0.04		$	(0.00	)

Weighted Average Common Shares Outstanding		15,514,344			15,411,248			15,514,344			15,422,096
Weighted Average Common and Common Equivalent Shares Outstanding		15,514,344			15,411,248			15,514,344			15,422,096

	March 28,2015			December 27,2014
	(unaudited)
ASSETS
Current Assets:
Cash	$	2,850,338		$	4,116,101
Accounts receivable, net		1,576,516			1,577,111
Inventory		2,078,982			1,233,480
Deferred tax asset		533,253			578,928
Inventory finance notes receivable		2,003,951			2,081,511
Prepaid expenses and other current assets		323,183			67,532
Total Current Assets		9,366,223			9,654,663
Fixed Assets:
Property, plant and equipment, net		2,264,664			2,307,495
Other Assets:
Inventory finance notes receivable, net		1,590,718			1,443,294
Deferred tax asset		1,425,139			1,439,538
Other assets		13,612			14,386
Total Other Assets		3,029,469			2,897,218
Total Assets	$	14,660,356		$	14,859,376
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Current maturities on long term debt	$	125,600		$	125,600
Accounts payable		570,569			327,775
Accrued expenses		1,570,856			1,790,432
Accrued warranties		1,245,000			1,245,000
Income tax payable		—			165,877
Total Current Liabilities		3,512,025			3,654,684
Long Term Liabilities:
Long-term debt, net of current maturities		659,400			690,800
Total Long Term Liabilities		659,400			690,800
Total Liabilities		4,171,425			4,345,484
Stockholders’ Equity:
Common stock, $0.001 par value, 100,000,000 shares authorized, 17,912,184 and 17,912,184 shares issued and 15,514,344 and 15,514,344 outstanding, respectively		17,914			17,914
Additional paid-in capital		33,336,067			33,336,067
Treasury Stock, at cost; 2,397,840 and 2,397,840 shares, respectively		(1,305,378	)		(1,305,378	)
Accumulated deficit		(21,559,672	)		(21,534,711	)
Total Stockholders’ Equity		10,488,931			10,513,892
Total Liabilities and Stockholders’ Equity	$	14,660,356		$	14,859,376

See notes to condensed consolidated financial statements (unaudited)

~~See~~F-3 ~~notes to consolidated financial statements~~

~~F-2~~Deer Valley Corporation & Subsidiaries

~~Table~~Condensed Consolidated Statements of ~~Contents~~Cash Flows

Deer Valley Corporation & Subsidiaries


	For The Six Month Perod Ended
	June 27, 2015			June 28, 2014
	(unaudited)			(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss)	$	569,628		$	(45,485	)
Adjustments to reconcile net income/(loss) to net cash used in/provided by operating activities:
Depreciation		102,906			85,994
Gain on sale of equipment		(9,500	)		(2,200	)
Provision for credit losses		18,050			(70,750	)
Changes in assets and liabilities:
(Increase)/decrease in accounts receivables		(164,411	)		(344,142	)
(Increase)/decrease in inventories		(387,813	)		(334,405	)
(Increase)/decrease in deferred tax asset		47,066			188,468
(Increase)/decrease in inventory finance notes receivable		(780,754	)		1,730,836
(Increase)/decrease in construction loan receivable		—			693,257
(Increase)/decrease in prepayments and other		(98,825	)		(30,676	)
Increase/(decrease) in accounts payable		198,664			(144,178	)
Increase/(decrease) in income tax payable		30,535			(373,470	)
Increase/(decrease) in accrued warranties		90,000			(40,000	)
Increase/(decrease) in accrued expenses		157,525			17,678

CASH FLOW (USED) IN/PROVIDED BY OPERATING ACTIVITIES	$	(226,929	)	$	1,330,927

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(173,809	)		(105,935	)
Proceeds from sale of property, plant and equipment		9,500			2,200

CASH FLOW (USED) IN INVESTING ACTIVITIES	$	(164,309	)	$	(103,735	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt		(62,800	)		(62,800	)
Proceeds from revolving credit loans		—			3,600,000
Repayments of revolving credit loans		—			(5,831,799	)
Purchases of treasury stock		—			(21,284	)

CASH FLOW (USED) IN FINANCING ACTIVITIES	$	(62,800	)	$	(2,315,883	)

NET (DECREASE) IN CASH	$	(454,038	)	$	(1,088,691	)
CASH, Beginning	$	4,116,101		$	3,107,213

CASH, Ending	$	3,662,063		$	2,018,522

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	21,679		$	57,125

Taxes	$	203,490		$	176,570

~~Consolidated~~See ~~Statements~~notes ofto ~~Operations~~condensed consolidated financial statements (unaudited)

	For The Three Month Period Ended
	March 28,2015			March 29,2014
	(unaudited)			(unaudited)
REVENUE	$	6,313,379		$	5,197,071
COST OF REVENUE		5,192,990			4,526,815
GROSS PROFIT		1,120,389			670,256
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:		1,139,400			1,201,626
OPERATING (LOSS)		(19,011	)		(531,370	)
OTHER INCOME (EXPENSES)
Other income		1,004			2,319
Interest expense		(8,446	)		(9,783	)
TOTAL OTHER INCOME/(EXPENSES)		(7,442	)		(7,464	)
(LOSS) BEFORE INCOME TAXES		(26,453	)		(538,834	)
INCOME TAX BENEFIT		1,492			197,090
NET (LOSS)	$	(24,961	)	$	(341,744	)
Net (Loss) Per Share (Basic)	$	(0.00	)	$	(0.02	)
Net (Loss) Per Share (Fully Diluted)	$	(0.00	)	$	(0.02	)
Weighted Average Common Shares Outstanding		15,514,344			15,432,891
Weighted Average Common and Common Equivalent Shares Outstanding		15,514,344			15,432,891

F-4

~~See~~Deer ~~notes~~Valley toCorporation & ~~consolidated~~Subsidiaries ~~financial statements~~

~~F-3~~Notes to Condensed Consolidated Financial Statements

~~Table~~June 27, of2015 ~~Contents~~

~~Deer~~(unaudited) ~~Valley Corporation & Subsidiaries~~

~~Consolidated~~NOTE ~~Statements~~1 of- ~~Cash~~BASIS ~~Flows~~OF PRESENTATION

	For The Three Month Period Ended
	March 28,2015			March 29,2014
	(unaudited)			(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)	$	(24,961	)	$	(341,744	)
Adjustments to reconcile net (loss) to net cash used in/provided by operating activities:
Depreciation		48,058			43,734
Gain on sale of equipment		(1,000	)		(2,200	)
Provision for credit losses		6,710			32,970
Changes in assets and liabilities:
(Increase)/decrease in receivables		595			354,543
(Increase)/decrease in inventories		(845,502	)		(626,046	)
(Increase)/decrease in deferred tax asset		60,074			93,752
(Increase)/decrease in inventory finance receivable		(76,574	)		622,081
(Increase)/decrease in construction loan receivable		—			497,335
(Increase)/decrease in prepayments and other		(157,301	)		(10,052	)
Increase/(decrease) in accounts payable		242,794			(105,498	)
Increase/(decrease) in income tax payable		(263,453	)		(467,412	)
Increase/(decrease) in estimated services and warranties		—			(80,000	)
Increase/(decrease) in accrued expenses		(219,576	)		(151,039	)
CASH FLOW (USED) IN OPERATING ACTIVITIES	$	(1,230,136	)	$	(139,576	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(5,227	)		(48,533	)
Proceeds from sale of property, plant and equipment		1,000			2,200
CASH FLOW (USED) IN INVESTING ACTIVITIES	$	(4,227	)	$	(46,333	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt		(31,400	)		(31,400	)
Proceeds from revolving credit loans		—			2,280,000
Repayments of revolving credit loans		—			(3,336,799	)
Purchases of treasury stock		—			(4,913	)
CASH FLOW (USED) IN FINANCING ACTIVITIES	$	(31,400	)	$	(1,093,112	)
NET (DECREASE) IN CASH	$	(1,265,763	)	$	(1,279,021	)
CASH, Beginning	$	4,116,101		$	3,107,213
CASH, Ending	$	2,850,338		$	1,828,192
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	10,944		$	32,020
Taxes	$	203,490		$	176,570

The accompanying unaudited condensed consolidated financial statements for the three and six month periods ended June 27, 2015 and June 28, 2014 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-Q. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

~~See~~The ~~notes~~unaudited financial information included in this report includes all adjustments which are, in the opinion of management, necessary to ~~consolidated~~reflect ~~financial~~a ~~statements~~fair statement of the results for the interim period. The operations for the three and six month periods ended June 27, 2015 are not necessarily indicative of the results of the full fiscal year.

FThe unaudited condensed consolidated financial statements included in this report should be read in conjunction with the consolidated financial statements and notes thereto included in the Registrant’s December 27, 2014 Annual Report on Form 10-4K and subsequent filings on Form 8-K.

~~Table~~NOTE of2 ~~Contents~~- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

~~Deer~~Principles ~~Valley~~of ~~Corporation &~~Consolidation - The condensed consolidated financial statements include the accounts of the Company and ~~Subsidiaries~~its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.

~~Notes~~Accounting Estimates - The Company’s financial statements are prepared in conformity with accounting principles generally accepted in the United States of America which require management to ~~Condensed~~make ~~Consolidated~~estimates ~~Financial~~and ~~Statements~~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 reporting period. Actual results could differ from those estimates.

~~March 28~~Fiscal Year - The Company operates on a 52-53 week fiscal year end. Each fiscal quarter consists of 13 weeks, ~~2015~~with an occasional fourth quarter extending to 14 weeks, if necessary.

~~(unaudited)~~Cash Equivalents - The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

~~NOTE~~The 1Company -maintains ~~BASIS~~its OFcash ~~PRESENTATION~~balances in two different financial institutions. The balances are insured by the Federal Deposit Insurance Corporation up to $250,000. Bank deposit accounts at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.

~~The~~Inventory ~~accompanying~~Finance ~~unaudited~~Notes ~~condensed~~Receivable ~~consolidated~~– ~~financial~~The ~~statements~~Company ~~for~~offers ~~the~~inventory-secured ~~three~~financing ~~month~~for ~~periods~~its ~~ended~~products ~~March 28,~~to ~~2015~~qualified retail dealers and ~~March 29,~~developers. ~~2014~~Finance ~~have~~contracts ~~been~~require ~~prepared~~periodic ininstallments ~~accordance~~of ~~with~~principal ~~accounting~~and ~~principles~~interest ~~generally~~over ~~accepted~~periods inof ~~the~~up ~~United~~to ~~States~~24 ofmonths. ~~America~~The ~~for~~Company ~~interim~~periodically ~~financial~~evaluates ~~information~~the ~~and~~collectibility ~~pursuant~~of toour ~~the~~notes ~~rules~~receivable and ~~regulations~~considers of the ~~Securities~~need ~~and~~to ~~Exchange~~establish ~~Commission for~~an ~~Form~~allowance ~~10-Q.~~for doubtful ~~Accordingly,~~accounts ~~they~~based doupon ~~not~~our ~~include~~historical ~~all~~collection ~~the~~experience. ~~information~~We ~~and~~have ~~footnotes~~established ~~required~~an byallowance ~~accounting~~for ~~principles~~doubtful ~~generally~~accounts ~~accepted~~of in$109,690 ~~the~~as ~~United~~of ~~States~~June 27, of2015 ~~America~~and ~~for~~$91,640 ~~complete~~at ~~financial~~December 27, ~~statements~~2014.

~~The~~Impairment ~~unaudited~~of ~~financial~~Long-Lived ~~information~~Assets ~~included~~- inProperty ~~this~~and ~~report~~intangible ~~includes~~assets ~~all~~are ~~adjustments~~material ~~which~~to ~~are~~our consolidated financial statements. Further, these assets are subject to the potential negative effects arising from factors beyond the Company’s control including changing economic conditions. The Company evaluates its tangible and definite-lived intangible assets for impairment annually during our fourth quarter or more frequently in the ~~opinion~~presence of ~~management~~circumstances or trends that may be indicators of impairment. The evaluation is a two step process. The first step is to compare our undiscounted cash flows, ~~necessary~~as projected over the remaining useful lives of the assets, to ~~reflect~~their respective carrying values. In the event that the carrying values are not recovered by future undiscounted cash flows, as a second step, the Company compares the carrying values to the related fair values and, if ~~statement~~the fair value is lower, record an impairment adjustment. For purposes of fair value, the ~~results~~Company generally uses replacement costs for ~~the~~tangible ~~interim~~fixed ~~period.~~assets ~~The~~and ~~operations~~discounted cash flows, using risk-adjusted discount rates, for intangible assets. These estimates are made by competent employees, using the best available information, under the direct supervision of our management. For tangible property, plant and equipment, there have been no changes in assumptions or methodologies in the three month period ended ~~March~~June 2827, 2015 ~~are~~as compared to December 27, 2014. The Company did not ~~necessarily~~have ~~indicative~~definite-lived ofintangible ~~the~~assets ~~results~~at ofJune 27, ~~the~~2015 ~~full~~and ~~fiscal~~December 27, ~~year~~2014.

The condensed consolidated financial statements included in this report should be read in conjunction with the consolidated financial statements and notes thereto included in the Registrant’s December 27, 2014 Annual Report on Form 10F-K5 ~~and subsequent filings on Form 8-K.~~

~~NOTE~~In 2accordance with FASB Topic ASC 420 “Exit on Disposal Cost Obligations”, the Company evaluates the carrying value of long-lived ~~SUMMARY~~assets OFto ~~SIGNIFICANT~~be ~~ACCOUNTING~~held ~~POLICIES~~and used when events and circumstances warrant such a review. The carrying value of long-lived assets is considered impaired when the anticipated undiscounted cash flow from such assets is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived assets. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that the fair market values are primarily based on independent appraisals and preliminary or definitive contractual arrangements less costs to dispose.

~~Principles~~Revenue Recognition - Revenue for manufactured homes sold to independent dealers generally is recorded when all of ~~Consolidation~~the -following ~~The~~conditions ~~condensed~~have ~~consolidated~~been ~~financial~~met; ~~statements~~(a) an ~~include~~order for the ~~accounts~~home ofhas been received from the ~~Company~~dealer, ~~and~~(b) an agreement with respect to payment terms (usually in the form of a written or verbal approval for payment has been ~~its~~received ~~wholly~~from ~~owned~~the ~~subsidiaries.~~dealer’s ~~Intercompany~~flooring ~~accounts~~institution), and ~~transactions~~(c) the ~~have~~home has been ~~eliminated~~shipped inand ~~consolidation~~risk of loss has passed to the dealer and collectability is reasonably assured.

~~Accounting~~Cost ~~Estimates~~ of Sales - The Company’s ~~financial~~factory-built ~~statements~~housing ~~are~~segment ~~prepared~~includes inthe ~~conformity~~following ~~with~~types ~~accounting~~of ~~principles~~expenses ~~generally accepted~~ in ~~the~~cost ~~United~~of ~~States~~sales: ofpurchase ~~America~~and receiving ~~which~~costs, ~~require~~freight ~~management~~in, todirect ~~make~~labor, ~~estimates~~supply ~~and~~costs, ~~assumptions~~warehousing, ~~that~~direct ~~affect~~and ~~the~~indirect ~~reported amounts~~overhead ofcosts, ~~assets~~inspection, ~~and~~transfer, ~~liabilities~~actual and ~~disclosure~~accrued ofwarranty, ~~contingent~~depreciation, ~~assets~~ and ~~liabilities~~amortization atcosts. ~~the~~The ~~date~~Company’s ~~of the~~ financial ~~statements~~services ~~and~~segment includes the ~~reported~~following ~~amounts~~types of ~~revenues and~~ expenses ~~during~~in ~~the~~cost ~~reporting~~of ~~period.~~sales: ~~Actual~~interest ~~results~~expense ~~could differ from those estimates.~~

~~Fiscal~~Selling, ~~Year~~General and Administrative - The Company ~~operates~~includes onthe afollowing types ~~52-53~~of ~~week~~expenses ~~fiscal~~in ~~year~~selling, ~~end.~~general ~~Each~~and ~~fiscal~~administrative ~~quarter~~expense: ~~consists~~sales ofsalaries, 13sales ~~weeks~~commissions, ~~with~~bad andebt ~~occasional fourth~~expense, ~~quarter~~advertising, ~~extending~~administrative tooverhead, 14administrative ~~weeks,~~salaries ifand ~~necessary~~bonuses and legal and professional fees.

~~Cash~~Income ~~Equivalents~~Taxes - ~~The~~Income ~~Company~~taxes ~~considers~~are ~~all~~accounted ~~highly~~for ~~liquid~~using ~~investments~~the liability method of accounting. Under this method, deferred tax assets and liabilities ~~with~~are ~~original~~recognized ~~maturities~~for the expected future tax consequences of ~~three~~differences ~~months~~between orthe ~~less~~carrying toamounts beof ~~cash~~assets ~~equivalents~~and liabilities and their respective tax basis, using currently enacted tax rates. The effect on deferred assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Earnings (Loss) Per Share - The Company ~~maintains~~uses ~~its~~the ~~cash~~guidance ~~balances~~set inforth ~~two~~under ~~different~~FASB ~~financial~~topic ~~institutions.~~ASC 260, “Earnings Per Share” for ~~The~~calculating ~~balances~~the ~~are~~basic ~~insured~~and diluted loss per share. Basic income/(loss) per share is computed by ~~the~~dividing ~~Federal~~net ~~Deposit~~income/(loss) ~~Insurance~~and ~~Corporation~~net upincome/(loss) attributable to ~~$250,000.~~common ~~Bank~~shareholders ~~deposit~~by ~~accounts~~the atweighted ~~times,~~average ~~may~~number ~~exceed~~of ~~federally~~common ~~insured~~shares ~~limits~~outstanding. ~~The~~Diluted income/(loss) ~~Company~~per ~~has~~share ~~not~~is ~~experienced~~computed ~~any~~similar ~~losses~~to inbasic ~~such~~loss ~~accounts~~per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential shares had been issued and if the additional shares were dilutive.

~~Inventory~~NOTE ~~Finance~~3 ~~Notes Receivable~~ - ~~The~~INVENTORY Company offers inventory-secured financing for its products to qualified retail dealers and developers. Finance contracts require periodic installments of principal and interest over periods of up to 24 months. The Company periodically evaluates the collectibility of our notes receivable and considers the need to establish an allowance for doubtful accounts based upon our historical collection experience. We have established an allowance for doubtful accounts of $98,350 as of March 28, 2015 and $234,930 at March 29, 2014.

~~Impairment~~Inventory ofconsisted Long-Lived Assets - Property and intangible assets are material to our consolidated financial statements. Further, these assets are subject to the potential negative effects arising from factors beyond the Company’s control including changing economic conditions. The Company evaluates its tangible and definite-lived intangible assets for impairment annually during our fourth quarter or more frequently in the presence of ~~circumstances or trends that may be indicators of impairment. The evaluation is a two step process. The first step is to compare our undiscounted cash flows, as projected over~~ the ~~remaining~~ ~~useful~~following ~~lives~~components: of the assets, to their respective carrying values. In the event that the carrying values are not recovered by future undiscounted cash flows, as a second step, the Company compares the carrying values to the related fair values and, if the fair value is lower, record an impairment adjustment. For purposes of fair value, the Company generally uses replacement costs for tangible fixed assets and discounted cash flows, using risk-adjusted discount rates, for intangible assets. These estimates are made by competent employees, using the best available information, under the direct supervision of our management. For tangible property, plant and equipment, there have been no changes in assumptions or methodologies in the three month period ended March 28, 2015 as compared to March 29, 2014. The Company did not have definite-lived intangible assets at March 28, 2015 and March 29, 2014.

F-5


	June 27, 2015		December 27, 2014
Raw Materials	$	1,028,704	$	883,363
Work-in-Process		280,996		305,689
Finished Goods		311,593		44,428

Total Inventory	$	1,621,293	$	1,233,480

~~Table~~NOTE of4 ~~Contents~~- INVENTORY FINANCE NOTES RECEIVABLE AND ALLOWANCE FOR LOAN LOSS

InThe ~~accordance with FASB Topic ASC 420 “Exit on Disposal Cost Obligations”, the~~ Company ~~evaluates~~offers ~~the carrying~~inventory-secured ~~value~~financing offor ~~long-lived~~its ~~assets~~products to ~~be held and used when events and circumstances warrant such~~ a ~~review.~~limited ~~The~~number ~~carrying value~~ of ~~long-lived~~qualified ~~assets~~retail isdealers ~~considered~~and ~~impaired when the anticipated undiscounted cash flow from such assets is less than its~~developers. ~~carrying~~Administrative ~~value.~~services Infor ~~that~~inventory-secured ~~event,~~financing aare ~~loss~~provided ~~is recognized based on the amount~~ by ~~which~~Triad ~~the~~Financial ~~carrying~~Services, ~~value~~Inc. ~~exceeds the fair market value~~ of ~~the~~Jacksonville, ~~long-lived assets~~Florida. ~~Fair~~Finance ~~market~~contracts ~~value~~require isperiodic ~~determined~~installments ~~primarily~~of ~~using~~principal ~~the~~and ~~anticipated~~interest ~~cash~~over ~~flows~~periods ~~discounted~~of atup ~~a rate~~to ~~commensurate~~24 ~~with the risk involved~~months. ~~Losses~~These ~~on long-lived assets to be disposed of~~ notes are ~~determined~~secured inby ~~a similar manner, except that~~ the ~~fair~~inventory ~~market~~collateral ~~values~~and ~~are~~other ~~primarily~~security ~~based~~depending on ~~independent~~borrower ~~appraisals and preliminary or definitive contractual arrangements less costs to dispose~~circumstances.

~~Revenue Recognition~~ F-6 Revenue for manufactured homes sold to independent dealers generally is recorded when all of the following conditions have been met; (a) an order for the home has been received from the dealer, (b) an agreement with respect to payment terms (usually in the form of a written or verbal approval for payment has been received from the dealer’s flooring institution), and (c) the home has been shipped and risk of loss has passed to the dealer and collectability is reasonably assured.

~~Cost~~Inventory offinance ~~Sales~~notes ~~- The Company’s factory-built housing segment includes the following types of expenses in cost of sales: purchase and receiving costs~~receivable, ~~freight in~~net, ~~direct~~consisted ~~labor,~~of supply costs, warehousing, direct and indirect overhead costs, inspection, transfer, actual and accrued warranty, depreciation, and amortization costs. The Company’s financial services segment includes the following ~~types of expenses in cost of sales~~: ~~interest expense~~

Selling, General and Administrative - The Company includes the following types of expenses in selling, general and administrative expense: sales salaries, sales commissions, bad debt expense, advertising, administrative overhead, administrative salaries and bonuses and legal and professional fees.


	June 27, 2015			December 27, 2014
Inventory finance notes receivable	$	4,397,199		$	3,616,445
Allowance for loan loss		(109,690	)		(91,640	)

		4,287,509			3,524,805
Current portion of inventory finance notes receivable		(2,528,354	)		(2,081,511	)

Total Inventory finance notes receivable, net	$	1,759,155		$	1,443,294

~~Earnings~~With ~~(Loss)~~respect ~~Per~~to ~~Share~~our -inventory ~~The~~finance ~~Company~~notes ~~uses~~receivable, ~~the~~80% ~~guidance~~of ~~set~~the ~~forth~~risk ~~under~~of ~~FASB~~loss ~~topic~~is ~~ASC~~spread ~~260,~~over ~~“Earnings~~six ~~Per~~borrowers ~~Share”~~as ~~for~~of ~~calculating~~June 27, ~~the~~2015 ~~basic~~ and ~~diluted~~five ~~loss~~borrowers ~~per~~as ~~share.~~of ~~Basic~~December 27, ~~income/(loss)~~2014. ~~per~~In ~~share~~addition isto ~~computed~~historical byexperience, ~~dividing~~borrower ~~net~~inventory ~~income/(loss)~~levels and ~~net~~activity ~~income/(loss)~~are ~~attributable~~monitored toin ~~common~~conjunction ~~shareholders~~with bya ~~the~~third-party ~~weighted~~provider ~~average~~to ~~number~~estimate ofthe ~~common~~potential ~~shares~~for ~~outstanding~~loss. ~~Diluted~~The Company ~~income/(loss)~~anticipates ~~per~~it ~~share~~will isbe ~~computed~~able ~~similar~~ to ~~basic~~resell any repossessed homes, thereby mitigating loss ~~per~~experience. ~~share~~If ~~except~~a ~~that~~default occurs and collateral is lost, the ~~denominator~~Company is ~~increased~~exposed to ~~include~~loss of the ~~number~~full value of ~~additional~~the ~~common~~note ~~shares~~receivable. ~~that~~The ~~would~~Company ~~have~~recorded ~~been~~a provision/(benefit) ~~outstanding~~for ifcredit ~~the~~losses ~~potential~~of ~~shares~~$18,050 ~~had~~and ~~been~~$(70,750) ~~issued~~for six month period ending June 27, 2015 and ifJune 28, 2014, respectively. The following table represents changes in the ~~additional~~ ~~shares~~estimated ~~were~~allowance ~~dilutive.~~for loan losses:

Income Taxes - Income taxes are accounted for using the liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis, using currently enacted tax rates. The effect on deferred assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized.


	June 27, 2015		June 28, 2014
Balance at beginning of period	$	91,640	$	201,960
Provision for credit losses		18,050		(70,750	)

Balance at end of period	$	109,690	$	131,210

NOTE 35 - ~~INVENTORY~~ACCRUED EXPENSES

~~Inventory~~Accrued expenses consisted of the following ~~components~~:

	March 28,2015		December 27,2014
Category	June 27,2015		December 27,2014
Raw Materials	$	1,169,859	$	883,363
Accrued dealer incentive program	$	279,180	$	347,421
Work-in-Process		249,119		305,689
Accrued third party billings		635,897		572,844
Finished Goods		660,004		44,428
Accrued compensation		518,925		410,143
Total Inventory	$	2,078,982	$	1,233,480
Accrued insurance		65,222		86,644
Accrued repurchase commitment		239,610		179,065
Other		209,123		194,315
Total Accrued Expenses	$	1,947,957	$	1,790,432

NOTE 46 - ~~INVENTORY~~PRODUCT ~~FINANCE~~WARRANTIES ~~NOTES RECEIVABLE AND ALLOWANCE FOR LOAN LOSS~~

The Company ~~offers~~provides ~~inventory~~the retail home buyer a one-~~secured~~year ~~financing~~limited ~~for~~warranty ~~its~~covering ~~products~~defects toin amaterial ~~limited~~or ~~number~~workmanship in home structure, plumbing and electrical systems. The Company estimated warranty costs are accrued at the time of ~~qualified~~the ~~retail~~sale ~~dealers~~to the dealer following industry standards and ~~developers~~historical warranty cost incurred. ~~Administrative~~ ~~services~~Periodic ~~for~~adjustments ~~inventory-secured~~to ~~financing~~the estimated warranty accrual are made ~~provided~~as byevents ~~Triad~~occur ~~Financial~~which ~~Services,~~indicate ~~Inc~~changes are necessary. As of ~~Jacksonville~~June 27, ~~Florida.~~2015, ~~Finance~~the ~~contracts~~Company ~~require~~has ~~periodic~~recorded ~~installments~~an accrued liability of ~~principal~~$1,335,000 ~~and~~for ~~interest~~estimated ~~over~~warranty ~~periods~~costs relating to homes sold, based upon management’s assessment of historical upexperience tofactors 24and ~~months~~current industry trends. ~~These~~Management ~~notes are~~reviews ~~secured~~its bywarranty requirements at the ~~inventory~~close ~~collateral~~of ~~and~~each ~~other~~reporting ~~security~~period ~~depending~~and onadjusts ~~borrower~~the ~~circumstances~~reserves accordingly.

F-67

~~Table~~The offollowing ~~Contents~~tabular presentation reflects activity in warranty reserves during the periods presented:

Inventory finance notes receivable, net, consisted of the following:


	For The Three Month Period Ended June 27, 2015			For The Six Month Period Ended June 27, 2015
Balance at beginning of period	$	1,245,000		$	1,245,000
Warranty charges		390,807			761,895
Warranty payments		(300,807	)		(671,895	)

Balance at end of period	$	1,335,000		$	1,335,000

	March 28,2015			December 27,2014
Inventory finance notes receivable	$	3,693,019		$	3,616,445
Allowance for loan loss		(98,350	)		(91,640	)
		3,594,669			3,524,805
Current portion of inventory finance notes receivable		(2,003,951	)		(2,081,511	)
Total Inventory finance notes receivable, net	$	1,590,718		$	1,443,294

NOTE 7 - REVOLVING CREDIT LOANS

~~With~~Effective ~~respect to our inventory finance notes receivable, 80% of the risk of loss is spread over five borrowers as of March~~September 2810, ~~2015 and December 27~~2013, ~~2014.~~Deer InValley ~~addition~~renewed toits ~~historical experience~~$5,000,000 ~~borrower~~Revolving ~~inventory~~Credit ~~levels~~Loan and ~~activity~~Security ~~are~~Agreement ~~monitored~~with inFifth ~~conjunction~~Third ~~with~~Bank, used afor ~~third-party~~display ~~provider~~model tofinancing ~~estimate~~for ~~the~~dealers ~~potential~~of ~~for~~the ~~loss.~~products Weproduced ~~have~~by ~~not~~DVH ~~experienced~~(the ~~any losses~~“Display toModel ~~date~~LOC”). The ~~Company~~Display ~~anticipates~~Model itLOC ~~will~~has bea ~~able~~two toyear ~~resell~~term ~~any~~and ~~repossessed~~has ~~homes,~~a ~~thereby~~variable ~~mitigating~~interest ~~loss~~rate ~~experience~~at 4.00% Ifabove aLIBOR ~~default~~or ~~occurs~~4.156% and ~~collateral~~4.154% isat ~~lost~~June 27, ~~the Company is exposed to loss of the full value of the note receivable. The~~ ~~Company~~2015 ~~recorded~~and ~~a provision for credit losses of $6~~December 27,~~710~~ ~~and $32~~2014,~~970~~ ~~for~~respectively. ~~three~~As ~~month~~of ~~period ending March~~June 2827, 2015 and ~~March~~December 2927, 2014, ~~respectively.~~the ~~The~~Company ~~following~~had ~~table~~no ~~represents~~outstanding ~~changes~~balance inunder the ~~estimated~~revolving ~~allowance~~credit ~~for~~ loan. ~~losses:~~

	March 28,2015		March 29,2014
Balance at beginning of period	$	91,640	$	201,960
Provision for credit losses		6,710		32,970
Balance at end of period	$	98,350	$	234,930

Effective September 10, 2013, Deer Valley renewed its Revolving Credit Loan and Security Agreement with Fifth Third Bank, used for short term working capital financing, letters of credit and as a bridge loan on financing the sale of retail units by DVH (the “Working Capital LOC”). The Working Capital LOC has a two year term and has a variable interest rate at 2.50% above LIBOR or 2.686% and 2.654% at June 27, 2015 and December 27, 2014, respectively. As of June 27, 2015 and December 27, 2014, the Company had no outstanding balance under the revolving credit loan.

~~NOTE~~Effective 5April 12, 2013 Deer Valley entered into a Revolving Credit Loan and Security Agreement with its primary bank, used for funding “construction-to-permanent ~~ACCRUED~~loans” ~~EXPENSES~~prior to the issue of a certificate of occupancy and ultimate resale of the loan to either a private or government controlled long term financing entities. On August 29, 2014 the Company closed the Loan Facility used for funding “construction –to-permanent loans”.

~~Accrued~~The ~~expenses~~amount ~~consisted~~available under the revolving credit loans is equal to the lesser of $8,000,000 or an amount based on defined percentages of accounts receivable and inventories reduced by any outstanding letters of credit. At June 27, 2015, $3,894,106 was available under the ~~following:~~revolving credit loans after deducting letters of credit of $65,000.

Category	March 28,2015		December 27,2014
Accrued dealer incentive program	$	187,587	$	347,421
Accrued third party billings		567,217		572,844
Accrued compensation		327,957		410,143
Accrued insurance		52,024		86,644
Accrued repurchase commitment		209,695		179,065
Other		226,376		194,315
Total Accrued Expenses	$	1,570,856	$	1,790,432

In addition to the revolving line of credit described in the preceding paragraph, DVH, during its normal course of business, is required to issue irrevocable standby letters of credit in the favor of independent third party beneficiaries to cover obligations under insurance policies. As of June 27, 2015, no amounts had been drawn on the above irrevocable letters of credit by the beneficiaries.

NOTE 68 - ~~PRODUCT~~LONG ~~WARRANTIES~~TERM DEBT – CURRENT MATURITIES

~~The~~On ~~Company~~May 26, ~~provides~~2006, ~~the~~DVH ~~retail~~entered ~~home~~into ~~buyer~~ a ~~one-year~~Loan ~~limited~~Agreement ~~warranty~~with ~~covering~~Fifth ~~defects~~Third inBank ~~material~~(the or“Lender”) ~~workmanship~~providing infor ~~home~~a ~~structure, plumbing~~loan ~~and~~of ~~electrical~~Two ~~systems.~~Million Dollars ~~The~~($2,000,000) ~~Company estimated warranty costs are accrued at~~ (the ~~time~~“Loan”) ofevidenced ~~the~~by ~~sale~~a topromissory ~~the~~note ~~dealer following industry standards~~ and ~~historical~~secured ~~warranty~~by ~~cost~~a ~~incurred.~~first ~~Periodic~~mortgage ~~adjustments~~on toDVH’s ~~the~~properties ~~estimated~~in ~~warranty~~Guin, ~~accrual~~Alabama ~~are made~~and ~~as events occur which indicate changes are necessary. As of March 28~~Sulligent, ~~2015~~Alabama, including the ~~Company~~structures ~~has~~and ~~recorded~~fixtures anlocated ~~accrued liability of $1~~thereon,~~245,000~~ ~~for~~as ~~estimated~~well ~~warranty~~as ~~costs relating to homes sold, based upon management~~DVH’s ~~assessment of~~ ~~historical~~interest ~~experience~~in ~~factors~~any ~~and~~lease ~~current industry trends~~thereof. ~~Management~~The ~~reviews~~Loan ~~its~~had ~~warranty~~a ~~requirements~~term atfrom ~~the~~May 26, ~~close~~2006 ofthrough ~~each~~June 1, ~~reporting period and adjusts the reserves accordingly~~2011.

FEffective June 1, 2011, DVH and the Lender entered an amendment that extended the term of the Real Estate Loan to June 1, 2016. The Loan has a variable interest rate at 4.00% above the One-7Month LIBOR-Index Rate. The Company, DVH and DVFC are guarantors on the Loan.

~~Table~~F-8 ~~of Contents~~

~~The~~NOTE ~~following~~9 ~~tabular~~– ~~presentation~~INCOME ~~reflects~~TAXES ~~activity in warranty reserves during the periods presented:~~

	For The Three MonthPeriod EndedMarch 28, 2015
Balance at beginning of period	$	1,245,000
Warranty charges		371,088
Warranty payments		(371,088	)
Balance at end of period	$	1,245,000

Income Taxes:

~~NOTE~~The 7components -of the ~~REVOLVING~~provision ~~CREDIT~~for ~~LOANS~~income taxes are as follows:

Effective September 10, 2013, Deer Valley renewed its $5,000,000 Revolving Credit Loan and Security Agreement with Fifth Third Bank, used for display model financing for dealers of the products produced by DVH (the “Display Model LOC”). The Display Model LOC has a two year term and has a variable interest rate at 4.00% above LIBOR or 4.179% and 4.154% at March 28, 2015 and December 27, 2014, respectively. As of March 28, 2015 and December 27, 2014, the Company had no outstanding balance under the revolving credit loan.


	Six months ended June 27, 2015
Current income tax expense	$	232,422
Deferred income tax expense		47,066

Total income tax expense	$	279,488

~~Effective~~The ~~September 10,~~items ~~2013,~~accounting ~~Deer Valley renewed its Revolving Credit Loan and Security Agreement with Fifth Third Bank, used~~ for ~~short term working capital financing, letters of credit and as a bridge loan on financing~~ the ~~sale~~difference ofbetween ~~retail~~income ~~units~~taxes bycomputed ~~DVH~~at (the ~~“Working~~federal ~~Capital~~statutory ~~LOC”). The Working Capital LOC has a two year term and has a variable interest~~ rate ~~at 2.50% above LIBOR or 2.679%~~ and ~~2.654% at March 28, 2015 and December 27, 2014, respectively. As of March 28, 2015 and December 27, 2014,~~ the ~~Company~~provision ~~had~~for income notaxes ~~outstanding~~are ~~balance~~as ~~under~~follows: ~~the revolving credit loan.~~

Effective April 12, 2013 Deer Valley entered into a Revolving Credit Loan and Security Agreement with its primary bank, used for funding “construction-to-permanent loans” prior to the issue of a certificate of occupancy and ultimate resale of the loan to either a private or government controlled long term financing entities. On August 29, 2014 the Company closed the Loan Facility used for funding “construction-to-permanent loans”.


	Six months ended June 27, 2015
	Amount			Impact on Rate
Income tax expense at federal rate	$	288,699			34.00	%

State tax expense, net of Federal effect		35,884			4.23	%

Permanent Differences:
Meals and entertainment		12,014			1.41	%
Officer’s life insurance		557			0.07	%
Domestic prodution activities deduction		(26,108	)		-3.07	%
Total tax credits		(31,558	)		-3.72	%

Total permanent differences		(45,095	)		-5.31	%

Rounding		—			0.00	%

Total income tax expense	$	279,488			32.92	%

~~The~~Deferred ~~amount~~income ~~available~~taxes ~~under~~reflect the ~~revolving~~net ~~credit~~tax ~~loans~~effects isof ~~equal~~temporary todifferences between the ~~lesser of~~carrying ~~$8,000,000 or an~~ amount ~~based~~of onassets ~~defined~~and liabilities ~~percentages~~for offinancial ~~accounts~~reporting ~~receivable~~purposes and ~~inventories~~the ~~reduced~~amounts byused ~~any~~for ~~outstanding~~income ~~letters~~tax ~~of credit~~purposes. AtSignificant ~~March 28,~~components ~~2015,~~of ~~$3,605,535 was available under~~ the ~~revolving~~Company’s ~~credit~~net ~~loans~~deferred ~~after~~income ~~deducting~~taxes ~~letters~~are ~~of credit~~as offollows: ~~$65,000.~~

In addition to the revolving line of credit described in the preceding paragraph, DVH, during its normal course of business, is required to issue irrevocable standby letters of credit in the favor of independent third party beneficiaries to cover obligations under insurance policies. As of March 28, 2015, no amounts had been drawn on the above irrevocable letters of credit by the beneficiaries.


	June 27, 2015
Current deferred tax assets:
Warranty reserve	$	510,317
Repurchase reserve		91,593
Loan loss reserve		41,930
Allowance for doubtful accounts		7,072
Inventory reserve		20,690

Total current deferred tax asset		671,602

Non-current deferred tax assets:
Goodwill impairment		1,480,432

Total non-current deferred tax assets		1,480,432

Current deferred tax liabilities:
Prepaid insurance		(53,596	)

Total current deferred tax liabilities		(53,596	)

Non-current deferred tax liability:
Accelerated depreciation		(135,506	)
Sale of assets		8,468

Total non-current deferred tax liability		(127,038	)

Total deferred tax assets (liabilities) - net	$	1,971,400

NOTE 810 - ~~LONG-TERM~~COMMITMENTS ~~DEBT~~AND CONTINGENCIES

OnLitigation ~~May 26,~~- ~~2006,~~The ~~DVH~~Company ~~entered~~in ~~into a Loan Agreement with Fifth Third Bank (~~the ~~“Lender”)~~normal ~~providing~~course ~~for a loan~~ of ~~Two~~business ~~Million Dollars~~is ~~($2,000,000)~~subject ~~(the~~to ~~“Loan”)~~claims ~~evidenced by a promissory note~~ and ~~secured~~litigation. byManagement aof ~~first~~the ~~mortgage~~Company onis ~~DVH’s~~of the ~~properties~~opinion ~~in Guin~~that, ~~Alabama~~based ~~and~~on ~~Sulligent,~~information ~~Alabama~~available, ~~including~~such ~~the~~legal ~~structures~~matters ~~and~~will ~~fixtures~~not ~~located~~ultimately ~~thereon,~~have asa ~~well~~material asadverse ~~DVH’s interest~~effect inon ~~any~~the ~~lease~~financial ~~thereof.~~position ~~The~~or ~~Loan~~results ~~had~~of aoperation ~~term~~of ~~from~~the ~~May 26, 2006 through June 1, 2011~~Company.

~~Effective~~Reserve ~~June 1,~~for ~~2011,~~Repurchase Commitments - DVH ~~and~~is contingently liable under the ~~Lender~~terms of repurchase agreements with financial institutions providing ~~entered~~inventory anfinancing ~~amendment~~for ~~that~~retailers ~~extended~~of DVH’s products. These arrangements, which are customary in the ~~term~~industry, ofprovide for the ~~Real~~repurchase ~~Estate~~of ~~Loan~~products sold to ~~June 1,~~retailers ~~2016~~in the event of default by the retailer. The ~~Loan~~risk ~~has~~of aloss ~~variable~~under ~~interest~~these agreements ~~rate~~is atspread 4over numerous retailers.~~00%~~ ~~above~~The price DVH is obligated to pay generally declines over the ~~One-Month~~period ~~LIBOR-Index~~of ~~Rate~~the agreement (typically 18 to 24 months) and the risk of loss is further reduced by the sale value of repurchased homes. The maximum amount for which the Company is contingently liable under repurchase agreements is approximately $7,990,000 at June 27, 2015. As of June 27, 2015 the Company reserved $239,610 for future repurchase losses, based on prior experience and an evaluation of dealers’ financial conditions. DVH to date has not experienced significant losses under these agreements, and ~~DVFC~~management ~~are~~does ~~guarantors~~not expect any future losses to have a material effect on the ~~Loan~~accompanying financial statements.

F-89

~~Table~~NOTE of11 ~~Contents~~- EQUITY TRANSACTIONS

~~NOTE~~Common 9Stock -Dividends ~~INCOME~~– ~~TAXES~~There were no dividends paid during the six month period ended June 27, 2015.

~~Income~~Treasury ~~Taxes:~~Stock – There were no treasury stock purchases during the six month period ended June 27, 2015.

~~The~~NOTE ~~components~~12 ~~of the~~– ~~provision~~SEGMENT ~~for~~INFORMATION ~~income taxes are as follows:~~

	Three months endedMarch 28, 2015
Current income tax (benefit)	$	(61,565	)
Deferred income tax expense		60,073
Total income tax benefit	$	(1,492	)

Our business segments consist of factory-built housing and financial services. Our chief decision making officer considers income (loss) from operations as the basis to measure segment profitability. The following table summarizes net sales, income (loss) from operations, and identifiable assets by segment for the three and six month periods ended June 27, 2015 and June 28, 2014.

The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes are as follows:


	For The Three Months Ended						For The Six Months Ended
	June 27, 2015			June 28, 2014			June 27, 2015			June 28, 2014
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenues from external customers
Factory-built housing	$	9,432,483		$	7,819,601		$	15,665,389		$	12,891,327
Financial services		84,438			99,631			164,910			224,976

Total revenues	$	9,516,921		$	7,919,232		$	15,830,299		$	13,116,303

Income from operations
Factory-built housing	$	910,323		$	474,443		$	902,661		$	93,069
Financial services		51,197			117,044			103,512			148,798
General corporate expenses		(86,246	)		(97,136	)		(149,912	)		(278,886	)

Total income (loss) from operations	$	875,274		$	494,351		$	856,261		$	(37,019	)

Identifiable assets by segment
Factory-built housing	$	11,259,061		$	9,885,040
Financial Services		4,385,868			4,351,414
Other		197,999			108,988

	$	15,842,928		$	14,345,442

	Three months endedMarch 28, 2015
	Amount			Impact onRate
Income tax (benefit) at federal rate	$	(8,994	)		34.00	%
State tax benefit, net of Federal effect		(1,118	)		4.23	%
Permanent Differences:
Meals and entertainment		8,287			-31.32	%
Officer’s life insurance		334			-1.26	%
Total permanent differences		8,621			-32.58	%
Rounding		(1	)		0.00	%
Total income tax (benefit)	$	(1,492	)		5.65	%

F-10

~~Deferred~~Item ~~income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes~~2. ~~Significant components of the Company~~Management’s ~~net~~Discussion ~~deferred~~and ~~income taxes are as follows:~~ Analysis

	March 28, 2015
Current deferred tax assets:
Warranty reserve	$	475,914
Repurchase reserve		80,158
Loan loss reserve		37,595
Allowance for doubtful accounts		7,072
Inventory reserve		9,318
Total current deferred tax asset		610,057
Non-current deferred tax assets:
Goodwill impairment		1,494,838
Total non-current deferred tax assets		1,494,838
Current deferred tax liabilities:
Prepaid insurance		(76,803	)
Total current deferred tax liabilities		(76,803	)
Non-current deferred tax liability:
Accelerated depreciation		(78,168	)
Sale of assets		8,468
Total non-current deferred tax liability		(69,700	)
Total deferred tax assets (liabilities) - net	$	1,958,392

Cautionary Notice Regarding Forward Looking Statements

~~NOTE~~We 10desire to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. This filing contains a number of forward-looking ~~COMMITMENTS~~statements ~~AND~~which ~~CONTINGENCIES~~reflect management’s current views and expectations with respect to our business, strategies, products, future results and events, and financial performance. All statements made in this filing other than statements of historical fact, including statements addressing operating performance, events, or developments which management expects or anticipates will or may occur in the future, including statements related to distributor channels, volume growth, revenues, profitability, new products, adequacy of funds from operations, statements expressing general optimism about future operating results, and non-historical information, are forward looking statements. In particular, the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “may,” variations of such words, and similar expressions identify forward-looking statements, but are not the exclusive means of identifying such statements, and their absence does not mean that the statement is not forward-looking. These forward-looking statements are subject to certain risks and uncertainties, including those discussed below. Our actual results, performance or achievements could differ materially from historical results as well as those expressed in, anticipated, or implied by these forward-looking statements. We do not undertake any obligation to revise these forward-looking statements to reflect any future events or circumstances.

~~Litigation~~Readers should not place undue reliance on these forward-looking ~~The~~statements, ~~Company~~which inare ~~the~~based on ~~normal~~management’s ~~course~~current expectations and projections about future events, are not guarantees of ~~business~~future isperformance, are subject to ~~claims~~risks, uncertainties and ~~litigation.~~assumptions ~~Management~~(including those described below), and apply only as of the ~~Company~~date is of this ~~the~~filing. ~~opinion~~Our ~~that~~actual results, ~~based~~performance onor ~~information~~achievements ~~available~~could differ materially from the results expressed in, or implied by, these forward-looking statements. Factors which could cause or contribute to such ~~legal~~differences ~~matters~~include, ~~will~~but are not ~~ultimately~~limited to, ~~have~~risks adiscussed ~~material~~in ~~adverse~~our ~~effect~~Annual Report on ~~the~~Form ~~financial~~10-K. ~~position~~We undertake no obligation to publicly update or ~~results~~revise ofany ~~operation~~forward-looking statements, whether as a result of ~~the~~new ~~Company~~information, future events, or otherwise.

~~Reserve~~Overview for Repurchase Commitments - DVH is contingently liable under the terms of repurchase agreements with financial institutions providing inventory financing for retailers of DVH’s products. These arrangements, which are customary in the industry, provide for the repurchase of products sold to retailers in the event of default by the retailer. The risk of loss under these agreements is spread over numerous retailers. The price DVH is obligated to pay generally declines over the period of the agreement (typically 18 to 24 months) and the risk of loss is further reduced by the sale value of repurchased homes. The maximum amount for which the Company is contingently liable under repurchase agreements is approximately $6,990,000 at March 28, 2015. As of March 28, 2015 the Company reserved $209,695 for future repurchase losses, based on prior experience and an evaluation of dealers’ financial conditions. DVH to date has not experienced significant losses under these agreements, and management does not expect any future losses to have a material effect on the accompanying financial statements.

FThe Company, through its wholly owned subsidiaries Deer Valley Homebuilders, Inc. (“DVH”), Deer Valley Financial Corp (“DVFC”) and Deer Valley Home Repair Services, Inc. (DVHRS), designs and manufactures factory built homes and provides dealer inventory-9secured financing for our factory built homes. The Company’s manufacturing plant located in Guin, Alabama, produces homes which are marketed in 14 states through a network of independent dealers, builders, developers and government agencies located primarily in the southeastern and south central regions of the United States. Inventory-secured loan financing is offered to qualified retail dealers and developers, through DVFC.

~~Table~~Our business segments consist of ~~Contents~~factory-built housing and financial services. Our financial services provide qualified independent retail dealers and developers with inventory-secured financing for homes the Company produces. The Company does not maintain separate operating segments for regions and does not separately report financial information by geographic sales area because they are similar products using similar production techniques and sold to the same class of customer. See Note 12 - Segment Information of the Notes to Condensed Consolidated Financial Statements for information on our net sales, income (loss) from operations, and identifiable assets by segment for the three and six month periods ended June 27, 2015 and June 28, 2014.

~~NOTE~~Industry 11and Company -Outlook ~~EQUITY TRANSACTIONS~~

~~Common~~Although, ~~Stock~~the ~~Dividends~~ factory-built ~~There~~housing ~~were~~industry nocontinues ~~dividends~~to ~~paid~~operate ~~during~~at historically low production and shipment levels, 2014 represented the ~~three~~fourth ~~month~~consecutive ~~period~~year ~~ended~~of ~~March 28~~growth for industry shipments of HUD code homes. According to data provided by the Manufactured Housing Institute (“MHI”), industry shipments of HUD code homes increased to approximately 52,000, 55,000, 60,000 and 64,000 units in 2011, 2012, 2013 and 2014, respectively. From January 2015 to June 2015, industry shipments were approximately 33,300 units; an approximately 8.6% increase from the same period in 2014. During the same timeframe, the Company’s shipments were 195 units; a 23.4% increase from the same period in 2014.

~~Treasury~~- ~~Stock~~1 - ~~There were no treasury stock purchases during the three month period ended March 28, 2015.~~

~~NOTE~~While 12we -are ~~SEGMENT~~encouraged ~~INFORMATION~~by the positive trends in shipments of HUD code homes, much of the increase in industry shipments has been outside of the Company’s core market of six states located in the south central region of the country. Approximately 82% of the Company’s shipments were to these six core market states during 2014. While overall industry shipments for the calendar year 2014 increased approximately 6.8%, shipments in these six states increased approximately 1.4%.

~~Our~~Sales ~~business segments consist~~ of factory-built housing ~~and~~are ~~financial~~affected ~~services.~~by ~~Our~~the ~~chief~~strength ~~decision~~of ~~making~~the ~~officer~~U.S. ~~considers~~economy, ~~income~~interest ~~(loss) from~~rates, ~~operations~~employment aslevels, consumer confidence and the ~~basis~~availability toof ~~measure~~wholesale ~~segment~~and ~~profitability~~retail financing. ~~The~~We ~~following~~believe ~~table~~our ~~summarizes~~market ~~net~~and ~~sales,~~housing ~~income~~in ~~(loss)~~general ~~from~~have ~~operations,~~reached bottom and ~~identifiable~~continue ~~assets~~to byshow ~~segment~~signs ~~for~~of improvement; however, we expect that there may be periods of volatility in the ~~three~~future. ~~month~~We ~~period~~believe that, ~~ended~~as ~~March 28~~employment and consumer confidence levels improve, ~~2015~~pent-up demand will be released, and, ~~March 29~~gradually, ~~2014~~more buyers will enter the market. We believe the key to full recovery in our business depends on these factors as well as an increased availability of consumer financing for the retail purchase of manufactured homes.

	March 28,2015			March 29,2014
Revenues from external customers
Factory-built housing	$	6,232,907		$	5,071,726
Financial Services		80,472			125,345
Total Revenues	$	6,313,379		$	5,197,071
Income from operations
Factory-built housing	$	(7,661	)	$	(331,375	)
Financial services		52,315			(18,246	)
General corporate expenses		(63,665	)		(181,749	)
Total Income from operations	$	(19,011	)	$	(531,370	)
Identifiable assets by segment
Factory-built housing	$	10,672,803		$	9,522,508
Financial Services		3,905,172			5,494,265
Other		82,381			85,146
	$	14,660,356		$	15,101,919

The Company’s executives continue to focus on challenges faced by our industry and the general economy. (i) As part of the Company’s strategic plan, management seeks to identify niche market opportunities where our custom building capabilities provide us with a competitive advantage. The Company continues to focus on the production of custom built, energy efficient, “heavy built homes” and has intensified efforts in innovative exterior elevations to meet the needs of homeowners and dealers. (ii) The Company continues to focus on operating activities to improve manufacturing efficiencies and maintaining a conservative cost structure. (iii) The Company continually looks for new market opportunities and expanding our product offering by developing innovative product designs and production methods.

~~NOTE~~Effective 13as -of ~~SUBSEQUENT~~April 15, ~~EVENTS~~2015, each of Timothy E. Brog, Kevin A. Cavanaugh, and Julius Bloomston resigned as a director of the Company. The resignations of Messrs. Brog, Cavanaugh, and Bloomston are not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. Brog and Bloomston were members of the Audit Committee of the board of directors of the Company at the time of their resignation.

~~Effective~~By asresolution of the Board of Directors at a meeting on April 1521, 2015, ~~each~~the ofremaining ~~Timothy~~directors E.appointed ~~Brog,~~and ~~Kevin~~elected A.Tony ~~Cavanaugh~~Bonidy, Lodovico de Visconti, and ~~Julius~~Ron ~~Bloomston~~Frank ~~resigned~~to asfill athe ~~director~~vacancies ofcreated by the ~~Company.~~ ~~The~~ resignations of ~~Messrs.~~ Brog, Cavanaugh, and Bloomston. ~~are~~Mr. Bonidy ~~not~~was appointed to the ~~result~~Company’s ofCompensation ~~any~~Committee ~~disagreement~~and ~~with~~Nominating Committee. Mr. de Visconti was appointed to the Company’s onAudit ~~any~~Committee. ~~matter~~Mr. Frank ~~relating~~was appointed to the Company’s ~~operations,~~Audit ~~policies~~Committee orand ~~practices.~~Compensation ~~Messrs~~Committee. ~~Brog~~Each ~~and~~of ~~Bloomston~~Bonidy’s, ~~were~~de ~~members~~Visconti’s and Frank’s acceptance of the ~~Audit~~appointments ~~Committee~~is effective as of April 21, 2015. There are no arrangements, understandings or any material plans, contracts or arrangements regarding Bonidy, de Visconti, and Frank that require disclosure. There are no transactions, during the ~~board~~last oftwo ~~directors~~(2) fiscal years, ofand there are no proposed transactions to which the Company ator its subsidiaries was or is to become a party, and the ~~time~~amount involved exceeds $120,000.00, in which Bonidy, de Visconti, and Frank, the new directors, or members of their immediate ~~resignation~~families had, or is to have, a direct or indirect material interest.

ByManufacturing ~~resolution~~Operations of the Board of Directors at a meeting on April 21, 2015, the remaining directors appointed and elected Tony Bonidy, Lodovico de Visconti, and Ron Frank to fill the vacancies created by the resignations of Messrs. Brog, Cavanaugh, and Bloomston. Mr. Bonidy was appointed to the Company’s Compensation Committee and Nominating Committee. Mr. de Visconti was appointed to the Company’s Audit Committee. Mr. Frank was appointed to the Company’s Audit Committee and Compensation Committee. Each of Messrs. Bonidy’s and de Visconti’s acceptance of the appointments is effective as of April 21, 2015. Mr. Frank’s acceptance of the appointment is subject to review by his law firm.

~~There~~We ~~are~~produce noall ~~arrangements,~~of ~~understandings~~our orfactory-built ~~any~~homes ~~material~~at ~~plans,~~our ~~contracts~~plant orin ~~arrangements~~Guin, ~~regarding Messrs~~Alabama. ~~Bonidy,~~During dethe ~~Visconti,~~quarter ~~and~~ended ~~Frank~~June 27, ~~that~~2015, ~~require disclosure.~~our ~~There~~plant ~~are~~was nostaffed ~~transactions,~~for a ~~during~~single ~~the~~shift; ~~last~~40 ~~two~~hour ~~(2) fiscal~~work ~~years,~~week and ~~there~~producing ~~are~~on noaverage ~~proposed~~19 ~~transactions~~“floors” toper ~~which~~week ~~the Company~~ or ~~its~~54% ~~subsidiaries~~of ~~was~~our ormaximum iscapacity toof ~~become~~ a ~~party~~single shift, ~~and~~40 ~~the~~hour ~~amount~~work ~~involved exceeds $120,000~~week.~~00,~~ inAs ~~which Messrs.~~of ~~Bonidy~~June 27, ~~de Visconti~~2015, ~~and~~our ~~Frank,~~backlog ~~the~~of ~~new~~orders ~~directors~~stood at approximately $1,925,000 or approximately ~~members~~11 ofdays ~~their~~at ~~immediate~~our ~~families~~current ~~had,~~production orrate. isWe to have, aone ~~direct~~idle orplant ~~indirect~~located ~~material~~in ~~interest~~Sulligent, Alabama.

F-When evaluating the Company’s operating performance, the key performance indicators management examines are (1) the Company’s production rate, in “floors” produced per day, (2) the cost of sales, (3) the size of the Company’s sales backlog, and (4) the prevailing market conditions. For more information on these performance indicators, please see the attached financial statements and notes thereto and the section of the Company’s Annual Report on Form 10-K titled “Description of Business.”

~~Table~~- of2 ~~Contents~~-

~~Item~~Financial 2.Operations ~~Management’s Discussion and Analysis~~

~~Cautionary~~The ~~Notice~~Company ~~Regarding~~offers ~~Forward~~inventory-secured ~~Looking~~financing ~~Statements~~for its products to a limited number of qualified retail dealers and developers. Products shipped to dealers under the Company’s inventory-secured financing program are recorded by the Company as sales and the dealers obligations to the Company are reflected as inventory finance notes receivable.

WeFinance ~~desire~~contracts torequire ~~take~~periodic ~~advantage~~installments of ~~the~~principal ~~“safe~~and ~~harbor”~~interest ~~provisions~~over periods of ~~the~~up ~~Private~~to ~~Securities~~twenty-four ~~Litigation~~months. ~~Reform~~These ~~Act~~notes ofare ~~1995.~~secured ~~This~~by ~~filing contains~~ a ~~number~~first ofpriority ~~forward-looking~~secured ~~statements~~interest ~~which~~in ~~reflect~~the ~~management’s~~inventory ~~current~~collateral ~~views~~ and ~~expectations~~other ~~with~~security ~~respect~~depending toon ~~our~~borrower ~~business, strategies, products, future results and events, and financial performance~~circumstances. ~~All~~Dealers ~~statements~~who ~~made~~sell ~~in this~~products ~~filing~~utilizing ~~other~~inventory-secured ~~than~~financing ~~statements~~are ofrequired ~~historical~~to ~~fact,~~make ~~including~~immediate ~~statements~~payment ~~addressing~~for ~~operating~~those ~~performance,~~products ~~events,~~to ~~or developments which management expects or anticipates will or may occur in~~ the Company ~~future,~~upon ~~including~~sale ~~statements related~~ to ~~distributor channels,~~the ~~volume~~retail ~~growth,~~customer. ~~revenues,~~This ~~profitability,~~type ~~new products, adequacy~~ of ~~funds from operations, statements expressing general optimism about future operating results, and non~~inventory-~~historical~~secured ~~information,~~financing ~~are~~accounts ~~forward~~for ~~looking statements. In particular~~approximately, ~~the~~ ~~words~~24% ~~“believe,” “expect,” “intend,” “anticipate,” “estimate,” “may,” variations~~ of ~~such~~the ~~words,~~Company’s ~~and~~sales ~~similar~~for ~~expressions identify forward-looking statements, but are not~~ the ~~exclusive means~~three ofmonth ~~identifying~~period ~~such~~ending ~~statements~~June 27, ~~and~~2015 ~~their~~compared ~~absence~~to ~~does~~14% ~~not~~of ~~mean that~~ the ~~statement~~Company’s issales ~~not~~for ~~forward-looking. These forward-looking statements are subject to certain risks and uncertainties, including those discussed below. Our actual results,~~the ~~performance~~three ormonth ~~achievements~~period ~~could~~ended ~~differ materially from historical results as well as those expressed in~~June 28, ~~anticipated, or implied by these forward-looking statements~~2014. ~~We do not undertake any obligation to revise these forward-looking statements to reflect any future events or circumstances.~~

~~Readers~~Although ~~should~~inventory-secured ~~not~~financing ~~place~~continues ~~undue~~to ~~reliance~~be onrestrictive ~~these~~for ~~forward-looking~~the ~~statements, which are based on management~~industry’s wholesale ~~current~~distribution ~~expectations and projections about future events~~chain, ~~are~~recently ~~not~~national ~~guarantees~~lenders ofhave ~~future~~introduced ~~performance,~~finance ~~are~~programs subject to ~~risks,~~less ~~uncertainties~~financial ~~and~~involvement ~~assumptions (including those described below), and apply only as~~ of the ~~date of this filing~~manufacturer. ~~Our actual results~~However, ~~performance~~until orgreater ~~achievements~~access ~~could differ materially from the results expressed in, or implied by, these forward-looking statements. Factors which could cause or contribute~~ to ~~such~~credit ~~differences~~for ~~include,~~inventory ~~but~~financing ~~are~~becomes ~~not~~available ~~limited to,~~participation ~~risks discussed~~ in ~~our Annual Report on Form 10~~ inventory-K.secured Wefinancing ~~undertake~~is nostill ~~obligation~~needed to ~~publicly~~maintain ~~update~~our ordistribution ~~revise any forward-looking statements, whether as a result of new information, future events, or otherwise~~base.

~~Overview~~On April 11, 2014, the Company did not renew its agreement with CIS Financial Services, Inc., to provide on a revolving basis, 80% of the funding for “construction-to-permanent loans” prior to the issue of a certificate of occupancy and ultimate resale of the loan to either private or government controlled long term financing entities.

~~The~~Results Company, through its wholly owned subsidiaries Deer Valley Homebuilders, Inc. (“DVH”), Deer Valley Financial Corp (“DVFC”) and Deer Valley Home Repair Services, Inc. (DVHRS), designs and manufactures factory built homes and provides dealer inventory-secured financing for our factory built homes. The Company’s manufacturing plant located in Guin, Alabama, produces homes which are marketed in 14 states through a network of ~~independent~~Operations dealers, builders, developers and government agencies located primarily in the southeastern and south central regions of the United States. Inventory-secured loan financing is offered to qualified retail dealers and developers, through DVFC.

~~Our~~The ~~business~~following ~~segments~~discussion ~~consist~~examines the results of ~~factory-built~~the ~~housing~~Company’s ~~and~~operations ~~financial~~for ~~services.~~the ~~Our~~three ~~financial~~and ~~services~~six ~~provide~~month ~~qualified~~periods ~~independent~~ended ~~retail~~June 27, 2015. ~~dealers~~This ~~and~~discussion ~~developers~~of ~~with~~our ~~inventory-secured~~financial ~~financing~~condition ~~for~~and ~~homes~~results ~~the~~of ~~Company~~operations ~~produces.~~should ~~The~~be ~~Company~~read ~~does~~in ~~not~~conjunction ~~maintain~~with ~~separate~~our ~~operating~~condensed ~~segments~~consolidated ~~for~~financial ~~regions~~statements and ~~does~~notes ~~not~~to ~~separately~~the ~~report~~consolidated financial ~~information~~statements, byincluded ~~geographic~~herewith. ~~sales~~This ~~area~~discussion ~~because~~should ~~they~~not ~~are~~be ~~similar~~construed ~~products~~to ~~using~~imply ~~similar~~that ~~production~~the ~~techniques~~results ~~and~~discussed ~~sold~~herein towill necessarily continue into the ~~same~~future, ~~class~~or ofthat ~~customer.~~any ~~See~~conclusion ~~Note~~reached 12herein -will ~~Segment~~necessarily ~~Information~~be indicative of actual operating results in the ~~Notes~~future. toSuch ~~Condensed~~discussion ~~Consolidated~~represents ~~Financial~~only ~~Statements~~the best ~~for~~present ~~information~~assessment onby our ~~net~~management. ~~sales,~~It ~~income~~is ~~(loss)~~also ~~from operations,~~imperative ~~and~~that ~~identifiable~~one ~~assets~~read byour ~~segment~~December 27, ~~for~~2014 ~~the~~Annual ~~three~~Report ~~month~~on ~~periods~~Form ~~ended~~10-K ~~March 28,~~and ~~2015~~subsequent ~~and~~filings ~~March 29,~~on ~~2014~~Form 8-K.

~~Industry~~HISTORICAL ~~and~~RESULTS ~~Company Outlook~~– THREE AND SIX MONTH PERIODS ENDED JUNE 27, 2015 AND JUNE 28, 2014.

~~Although,~~Revenues. ~~the~~Overall ~~factory-built~~gross ~~housing~~revenue ~~industry~~for ~~continues~~the tothree ~~operate~~month atperiod ~~historically~~ended ~~low~~June 27, ~~production~~2015 ~~and~~was ~~shipment~~$9,516,921 ~~levels~~compared to $7,919,232 ~~2014 represented~~for the ~~fourth~~three ~~consecutive~~month period ~~year~~ended ofJune 28, ~~growth~~2014, ~~for~~representing ~~industry~~an ~~shipments~~increase of ~~HUD~~$1,597,689, ~~code~~or ~~homes~~approximately 20.2%. ~~According~~Overall togross ~~data~~revenue ~~provided~~for bythe six month period ended June 27, 2015 was $15,830,299 compared to $13,116,303 for the ~~Manufactured~~six ~~Housing~~month ~~Institute~~period ~~(“MHI”)~~ended June 28, ~~our~~2014, ~~industry~~representing ~~shipped~~an ~~approximately~~increase 64of $2,~~000~~713,996, ~~HUD~~or ~~code~~approximately ~~homes~~20.7%. ~~during~~The increase in revenue for the ~~calendar~~ ~~year~~three ~~2014~~and six month periods ended June 27, 2015 compared to ~~approximately~~the 60three and six month periods ended June 28,~~000~~ ~~HUD~~2014, ~~code~~is primarily ~~manufactured~~increased ~~homes~~home ~~for~~sales. The improved home sales volume resulted from strengthening market conditions. Although we remain cautiously optimistic, several challenges such as sluggish wage growth, low consumer confidence levels, the ~~calendar~~restrictive mortgage ~~year~~lending ~~2013~~environment and the threat of more foreclosures continue to hinder a full recovery in the housing market.

~~While~~Gross weProfit. Gross ~~are~~profit ~~encouraged~~for by the ~~positive~~three ~~trends~~month inperiod ~~shipments~~ended June 27, 2015 was $2,171,217 or 22.8% of ~~HUD~~total ~~code~~revenue ~~homes~~compared to $1,518,811 ~~much~~or 19.2% of total revenue for the ~~increase~~three inmonth ~~industry~~period ~~shipments~~ended ~~has~~June 28, ~~been~~2014. ~~outside~~Gross ofprofit for the ~~Company’s~~six ~~core~~month period ~~market~~ended June 27, 2015 was $3,291,604 or 20.8% of total revenue compared to $2,189,067 or 16.7% of total revenue for the six ~~states~~month ~~located~~period ended June 28, 2014. The increase in gross profit for the ~~south~~three ~~central~~and ~~region~~six month period is attributable to higher revenues, increased production efficiencies gained through greater utilization capacity and lower service and warranty cost. The Company includes the following types of expenses in cost of sales: purchase and receiving costs, freight in, direct labor, supply costs, warehousing, direct and indirect overhead costs, inspection, transfer, actual and accrued warranty, depreciation, and amortization costs.

-Selling, General, and Administrative Expenses. Selling, general, and administrative expenses for the three month period ended June 27, 2015 were $1,295,943 -compared to $1,024,460 for the three month period ended June 28, 2014. Selling, general, and administrative expenses for the six month period ended June 27, 2015 were $2,435,343 compared to $2,226,086 for the six month period ended June 28, 2014. The increase in selling, general and administrative expenses for the three and six month periods primarily relates to increased selling and administrative

~~Table~~- of3 ~~Contents~~-

~~the~~cost ~~country.~~associated ~~Approximately~~with ~~82%~~the ofincrease ~~the~~in ~~Company’s~~revenues, ~~shipments~~which were tooffset ~~these~~in-part ~~six~~by ~~core~~a ~~market~~decrease ~~states. While overall industry shipments for the calendar year 2014 increased approximately 6.8%, shipments~~ in ~~these~~general ~~six~~corporate ~~states increased approximately 1~~expenses.~~4%.~~ The ~~manufactured housing industry and~~ Company ~~home~~includes ~~sales~~the ~~continue~~following totypes ~~struggle~~of ~~due~~expenses toin ~~ongoing~~selling, ~~economic~~general ~~challenges. Low consumer confidence levels~~ and ~~high unemployment and underemployment~~ ~~rates~~administrative ~~are~~expense: ~~two~~sales ofsalaries, ~~the~~sales ~~most~~commissions, ~~significant~~bad ~~challenges~~debt ~~affecting~~expense, ~~buyers~~advertising, ofadministrative ~~factory-built homes. Low consumer confidence regarding the outlook for jobs is not conducive for potential customers to commit to a home purchase. Historically~~overhead, ~~lower-income households~~administrative ~~are~~salaries ~~among~~and ~~the~~bonuses ~~largest~~and ~~segments~~legal ~~of new factory-built home purchasers. Lower-income households are particularly affected by high unemployment~~ and ~~underemployment~~professional ~~rates~~fees.

WeNet ~~believe~~Income ~~our~~(Loss). ~~market~~The ~~and~~net ~~housing~~income infor ~~general~~the ~~have~~three ~~reached~~month ~~bottom~~period ~~and~~ended ~~continue~~June 27, 2015 was $594,590 compared to ~~show~~net ~~signs~~income of ~~improvement;~~$296,258 ~~however~~for the three month period ended June 28, we2014, ~~expect~~representing ~~that~~an ~~there~~increase ~~may be~~in ~~periods~~net income of ~~volatility~~$298,332. inThe net income for the ~~future.~~six Wemonth ~~believe~~period ~~that~~ended June 27, as2015 ~~employment~~was ~~and~~$569,628 ~~consumer~~compared ~~confidence~~to ~~levels~~net ~~improve~~(loss) of $45,485 ~~pent-up~~for ~~demand~~the ~~will~~six bemonth ~~released,~~period ~~and~~ended June 28, ~~gradually~~2014, ~~more~~representing ~~buyers~~an ~~will~~increase ~~enter~~in ~~the~~net ~~market~~income of $615,113. WeThe ~~believe~~increase in net income for the ~~key~~three toand ~~full~~six ~~recovery~~month inperiod ~~our~~ended ~~business depends~~June 27, on2015 ~~these~~compared ~~factors~~to asthe ~~well~~three asand ansix ~~increased~~month ~~availability~~period ofended ~~consumer~~June 28, ~~financing~~2014, ~~for~~is ~~the~~attributable ~~retail~~to ~~purchase~~an increase ofin ~~manufactured~~revenues ~~homes~~and gross profit previously discussed.

~~The Company’s~~Liquidity ~~executives continue to focus on challenges faced by our industry~~ and ~~the~~Capital ~~general~~Resources economy. (i) As part of the Company’s strategic plan, management seeks to identify niche market opportunities where our custom building capabilities provide us with a competitive advantage. The Company continues to focus on the production of custom built, energy efficient, “heavy built homes” and has intensified efforts in innovative exterior elevations to meet the needs of homeowners and dealers. (ii) The Company continues to focus on operating activities to improve manufacturing efficiencies and maintaining a conservative cost structure. (iii) The Company continually looks for new market opportunities and expanding our product offering by developing innovative product designs and production methods.

~~Effective~~Management asbelieves ofthat ~~April 15,~~the ~~2015, each~~Company ofcurrently ~~Timothy~~has E.sufficient ~~Brog~~cash flow from operations, ~~Kevin~~available A.bank ~~Cavanaugh~~borrowings, cash, and ~~Julius~~cash ~~Bloomston~~equivalents to ~~resigned~~meet asits ashort-term ~~director~~working ofcapital ~~the Company~~requirements. The ~~resignations~~Company had $3,662,063 in cash and cash equivalents as of ~~Messrs.~~June 27, ~~Brog~~2015, ~~Cavanaugh~~compared to $4,116,101 in cash and ~~Bloomston~~cash ~~are~~equivalents ~~not~~and ~~the~~short-term ~~result~~investments as of ~~any~~December 27, ~~disagreement~~2014. ~~with~~The decrease ~~the~~in ~~Company~~cash onand ~~any~~cash ~~matter~~equivalents ~~relating~~is primarily attributable to ~~the Company’s~~an ~~operations,~~increase ~~policies~~in orinventory ~~practices.~~finance ~~Messrs~~notes receivable and inventories. ~~Brog~~Should our costs and ~~Bloomston~~expenses ~~were~~prove ~~members~~to ofbe ~~the~~greater ~~Audit~~than ~~Committee~~we ofcurrently ~~the~~anticipate ~~board~~or ofshould ~~directors~~we ofchange ~~the~~our ~~Company~~current business atplan in a manner which will increase or accelerate our anticipated costs or capital demand, such as through the ~~time~~acquisition of ~~their~~new ~~resignation~~products, our working capital could be depleted at an accelerated rate.

ByAs ~~resolution~~ of ~~the Board of Directors at a meeting on April~~June 2127, 2015, the ~~remaining~~Company ~~directors~~had ~~appointed~~no ~~and~~outstanding ~~elected~~balance ~~Tony~~under ~~Bonidy, Lodovico~~its derevolving ~~Visconti,~~credit ~~and~~loan ~~Ron Frank to fill the vacancies created by the resignations of Messrs~~facilities. ~~Brog,~~In ~~Cavanaugh~~addition, ~~and~~we ~~Bloomston.~~have ~~Mr. Bonidy~~a ~~was appointed to the Company’s Compensation Committee and Nominating Committee. Mr. de~~commercial ~~Visconti~~real ~~was~~estate ~~appointed~~mortgage tofrom ~~the~~its ~~Company’s~~primary ~~Audit~~bank ~~Committee.~~that ~~Mr. Frank~~had ~~was~~a ~~appointed~~balance, ~~to the Company’s Audit Committee and Compensation Committee. Each of Messrs. Bonidy’s and de Visconti’s acceptance of the appointments is effective~~ as of ~~April~~June 2127, 2015., ~~Mr. Frank’s acceptance~~ of ~~the~~$753,600, ~~appointment~~and isdue ~~subject~~July 1, ~~to review by his law firm~~2016.

~~There~~1 ~~are no~~- arrangements, understandings or any material plans, contracts or arrangements regarding Messrs. Bonidy, de Visconti, and Frank that require disclosure. There are no transactions, during the last two (2) fiscal years, and there are noCash ~~proposed~~flow ~~transactions~~from tooperating ~~which~~activities: the Company or its subsidiaries was or is to become a party, and the amount involved exceeds $120,000.00, in which Messrs. Bonidy, de Visconti, and Frank, the new directors, or members of their immediate families had, or is to have, a direct or indirect material interest.

~~Manufacturing~~For ~~Operations~~the six month period ended June 27, 2015, operating activities used net cash of $226,929 primarily as a result of the following:

~~We produce all of our factory-built homes at our plant in Guin, Alabama. During the quarter ended March 28, 2015, our plant was staffed for~~ (a) ~~single~~We ~~shift;~~had 40net ~~hour~~income ~~work week and producing on average 16 “floors” per week or 44%~~ of ~~our maximum capacity of a single shift, 40 hour work week. As of March 28, 2015, our backlog of orders stood at approximately~~ $1569,~~965,000 or approximately 15 days at our current production rate. We have one idle plant located in Sulligent, Alabama.~~ 628

~~When~~Changes ~~evaluating~~in ~~the Company’s~~our operating ~~performance,~~assets ~~the~~and ~~key~~liabilities ~~performance indicators management examines~~ are ~~(1) the~~as ~~Company’s~~follows: production rate, in “floors” produced per day, (2) the cost of sales, (3) the size of the Company’s sales backlog, and (4) the prevailing market conditions. For more information on these performance indicators, please see the attached financial statements and notes thereto and the section of the Company’s Annual Report on Form 10-K titled “Description of Business.”

-(b) 2an -increase in accounts receivable of $164,411 (a use of cash),

~~Table~~(c) an increase in inventories of ~~Contents~~$387,813 (a use of cash), primarily as a result of a return to normal production levels subsequent to holiday shutdown period at December 27, 2014,

~~Financial~~(d) ~~Operations~~an increase in inventory finance notes receivable of $780,754 (a use of cash), which were partially offset by,

~~The~~(e) ~~Company~~an ~~offers~~increase ~~inventory-secured~~in ~~financing~~other ~~for~~accrued ~~its~~expenses ~~products~~of to$157,525 (a ~~limited~~source ~~number~~ of ~~qualified~~cash), ~~retail dealers~~ and developers. Products shipped to dealers under the Company’s inventory-secured financing program are recorded by the Company as sales and the dealers obligations to the Company are reflected as inventory finance notes receivable. ,

~~Finance~~(f) ~~contracts~~an ~~require~~increase ~~periodic~~in ~~installments~~accounts ofpayable ~~principal and interest over periods~~ of up$198,664 ~~to twenty-four months. These notes are secured by~~ (a ~~first~~source priority secured interest in the inventory collateral and other security depending on borrower circumstances. Dealers who sell products utilizing inventory-secured financing are required to make immediate payment for those products to the Company upon sale to the retail customer. This type of ~~inventory-secured financing accounts for approximately~~cash), ~~21%~~primarily ofas the ~~Company’s~~result ~~sales~~of ~~for~~a ~~the~~return ~~three~~to ~~month~~normal ~~period~~production ~~ending~~levels ~~March 28,~~subsequent ~~2015 compared~~ to ~~37%~~holiday ofshutdown ~~the Company’s sales for the three month~~ period ~~ended~~at ~~March 29~~December 27, 2014.

~~Although~~2 ~~inventory~~-~~secured~~ ~~financing~~Cash ~~continues~~flow tofrom beinvesting ~~restrictive~~activities: for the industry’s wholesale distribution chain, recently national lenders have introduced finance programs subject to less financial involvement of the manufacturer. The increased flexibility has allowed the Company to begin to reduce its involvement in direct inventory-secured financing. However, until greater access to credit for inventory financing becomes available participation in inventory-secured financing is still needed to maintain our distribution base.

OnThe ~~April 11,~~net ~~2014,~~cash ~~the~~used ~~Company~~in ~~did~~investing ~~not~~activities ~~renew~~for ~~its~~the ~~agreement~~six ~~with~~month ~~CIS~~period ~~Financial~~ending ~~Services~~June 27, ~~Inc.,~~2015 towas ~~provide~~$164,309, onwhich areflects ~~revolving~~capitalization ~~basis, 80%~~ of ~~the~~ ~~funding~~normal ~~for~~operating ~~“construction-to-permanent~~purchases ~~loans” prior to the issue~~ of ~~a certificate of occupancy and ultimate resale of the loan to either private or government controlled long term financing entities~~equipment.

~~Results~~3 of- ~~Operations~~Cash flow from financing activities:

The ~~following discussion~~net ~~examines~~cash ~~the~~used ~~results~~in offinancing ~~the~~activities ~~Company’s operations~~ for the ~~three~~six month period ~~ended~~ending ~~March~~June 2827, 2015. ~~This~~was ~~discussion of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and notes to the consolidated financial statements~~$62, ~~included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future~~800, orwhich ~~that~~reflects ~~any~~scheduled ~~conclusion reached~~principal ~~herein~~payments ~~will necessarily be indicative~~ of actual operating results in the future. Such discussion represents only the best present assessment by our management. It is also imperative that one read our December 27, 2014 Annual Report on Form 10long-~~K and~~term ~~subsequent filings on Form 8-K~~debt.

~~HISTORICAL~~The ~~RESULTS~~Company –is ~~THREE~~contingently ~~MONTH~~liable ~~PERIODS~~under ~~ENDED~~the ~~MARCH~~terms 28of the repurchase agreements with third party financial institutions providing inventory financing for retailers of our products. For more information on the repurchase agreements, ~~2015~~including ~~AND~~the ~~MARCH~~Company’s 29contingent liability there under, ~~2014~~please see “Reserve for Repurchase Commitments” below.

~~Revenues.~~- ~~Overall~~4 ~~gross~~- revenue for the three month period ended March 28, 2015 was $6,313,379 compared to $5,197,071 for the three month period ended March 29, 2014, representing an increase of $1,116,308, or approximately 21.5%. The increase in revenue for the three month period ended March 28, 2015 compared to the three month period ended March 29, 2014, is in part attributable to unusual harsh winter conditions during the three month period ended March 29, 2014 causing a disruption of business services and delivery of goods. Although we remain cautiously optimistic, several challenges such as persistently high unemployment levels, low consumer confidence levels, the restrictive mortgage lending environment and the threat of more foreclosures continue to hinder a recovery in the housing market.

~~Gross Profit. Gross profit for the three month period ended March 28~~DVH, ~~2015~~during ~~was~~its ~~$1,120,389~~normal orcourse ~~17.8%~~ of ~~total~~business, ~~revenue~~is ~~compared~~required to ~~$670,256~~provide ~~or 12.9%~~irrevocable ofstandby ~~total~~letters ~~revenue~~of credit ~~for~~to ~~the~~cover ~~three~~obligations ~~month~~under ~~period~~its ~~ended~~workers ~~March 29,~~compensation ~~2014.~~insurance ~~The~~policy ~~increase~~ in ~~gross~~the ~~profit~~amount of $~~450~~65,~~133 is attributable to higher revenues, increased production efficiencies gained through greater utilization capacity and lower service and warranty cost~~000. ~~The~~As ~~Company includes the following types~~ of ~~expenses in cost of sales: purchase and receiving costs~~June 27, ~~freight in~~2015, ~~direct~~no ~~labor,~~amounts ~~supply~~had ~~costs,~~been ~~warehousing,~~drawn ~~direct~~on ~~and~~the ~~indirect~~above ~~overhead~~irrevocable ~~costs,~~letters ~~inspection,~~of ~~transfer,~~credit ~~actual~~by ~~and~~the ~~accrued warranty, depreciation, and amortization costs~~beneficiaries.

~~Selling,~~Critical ~~General,~~Accounting ~~and~~Policies Administrative Expenses. Selling, general, and administrative expenses for the three month period ended March 28, 2015 were $1,139,400 compared to $1,201,626 for the three month period ended March 29, 2014. The decrease in selling, general and administrative expenses, of $62,226 primarily relates to a decrease in salaries and wages and health insurance costs. The Company includes the following types of expenses in selling, general and administrative expense: sales salaries, sales commissions, bad debt expense, advertising, administrative overhead, administrative salaries and bonuses and legal and professional fees.

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and judgments which affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. For a description of those estimates, see Note 2, Summary of Significant Accounting Policies, contained in the explanatory notes to the Company’s unaudited financial statements for the quarter ended June 27, 2015, contained in this filing, and the Company’s Form 10-K 3for December 27, 2014. On an ongoing basis, we evaluate our estimates, including those related to reserves, deferred tax assets, valuation allowances, impairment of long-lived assets, fair value of equity instruments issued to consultants for services, and estimates of costs to complete contracts. We base our estimates on historical experience and on various other assumptions which we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities which are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. However, we believe that our estimates, including those for the above-described items, are reasonable.

~~Table~~Critical ofAccounting ~~Contents~~Estimates

~~Net~~Management ~~(Loss).~~is ~~The~~aware ~~net~~that ~~loss~~certain ~~for~~changes ~~the~~in ~~three~~accounting ~~month~~estimates ~~period~~employed ~~ended~~in ~~March 28,~~generating ~~2015~~financial ~~was~~statements ~~$24,961~~can ~~compared to~~have ~~net~~the ~~loss~~effect of ~~$341,744~~making ~~for~~ the Company ~~three~~look ~~month~~more ~~period~~or ~~ended~~less ~~March 29,~~profitable ~~2014,~~than ~~representing~~it aactually ~~decrease in net loss of $316,783~~is. ~~The~~Management ~~decrease~~believes ~~in net loss for~~ the ~~three~~Company’s ~~month~~estimates ~~period~~are ~~ended~~reasonable. ~~March 28,~~A ~~2015~~summary ~~compared~~of to the ~~three~~most ~~month~~critical ~~period~~accounting ~~ended March 29,~~estimates ~~2014,~~employed isby ~~attributable~~the toCompany ~~an increase~~ in ~~revenues~~generating ~~and~~financial ~~gross~~statements ~~profit~~follows ~~and a decrease in selling, general and administrative expenses~~below.

~~Liquidity~~Warranties ~~and Capital Resources~~

~~Management~~We ~~believes~~provide ~~that~~our ~~the~~retail buyers ~~Company~~with ~~currently~~a ~~has~~one-year ~~sufficient~~limited ~~cash~~warranty ~~flow~~covering ~~from~~defects ~~operations,~~in ~~available~~material ~~bank~~or ~~borrowings~~workmanship, ~~cash,~~including plumbing and ~~cash~~electrical ~~equivalents~~systems. We record a liability for estimated future warranty costs relating to homes sold, based upon our assessment of historical experience and industry trends. In making this estimate, we evaluate historical sales amounts, warranty costs related to ~~meet~~homes ~~its~~sold ~~short-term~~and ~~working~~timing ~~capital~~in ~~requirements~~which any work orders are completed. The Company ~~had~~has accrued a warranty liability reserve of $21,~~850~~335,~~338~~000 on inits ~~cash~~balance ~~and~~sheet ~~cash equivalents~~ as of ~~March~~June 2827, 2015, as compared to $41,~~116~~145,~~101~~000 ~~in cash and cash equivalents and short-term investments~~ as of ~~December~~June 2728, 2014. ~~The decrease~~Based inon ~~cash~~management’s ~~and~~assessment ~~cash~~of ~~equivalents~~historical isexperience ~~primarily~~and ~~attributable~~current totrends ~~an increase~~ in ~~inventories~~wholesale shipments and ~~payment~~dealer ofinventories ~~certain~~we ~~expenses~~increased ~~accrued~~our warranty ~~during~~provision ~~2014~~by $90,000 ~~but~~for ~~payable during~~ the ~~first~~ quarter ofended June 28, 2015. ~~Should~~Although ~~our~~we ~~costs~~maintain ~~and~~reserves ~~expenses~~for ~~prove~~such toclaims, there can be ~~greater~~no ~~than we~~assurance ~~currently~~that ~~anticipate~~warranty orexpense ~~should~~levels wewill ~~change~~remain ~~our~~at current ~~business~~levels ~~plan~~or inthat athe ~~manner~~reserves ~~which~~that ~~will~~we ~~increase~~have orset ~~accelerate~~aside will ~~our~~continue ~~anticipated~~to ~~costs~~be oradequate. ~~capital~~A ~~demand,~~large ~~such~~number asof ~~through~~warranty ~~the~~claims ~~acquisition~~which ofexceed ~~new~~our ~~products,~~current ~~our~~warranty ~~working~~expense ~~capital~~levels could behave ~~depleted~~a atmaterial ~~an accelerated~~adverse ~~rate~~effect upon our results of operations.

AsVolume ofIncentives ~~March 28,~~Payable 2015, the Company had no outstanding balance under its revolving credit loan facilities. In addition, we have a commercial real estate mortgage from its primary bank that had a balance, as of March 28, 2015, of $785,000.

1We have relied upon volume incentive payments to our independent dealers who retail our products. These volume incentive payments are accounted for as a reduction to gross sales, and are estimated and accrued when sales of our factory-built homes are made to our ~~Cash~~independent ~~flow~~dealers. Volume incentive reserves are recorded based upon the annualized purchases of our independent dealers who purchase a qualifying amount of home products from ~~operating~~us. ~~activities:~~We accrue a liability to our dealers, based upon estimates derived from historical payout rates. As of June 27, 2015 and June 28, 2014, we had a reserve for volume incentives payable of $279,180 and $347,421, respectively.

~~For~~Reserve ~~the~~for ~~three~~Repurchase ~~month~~Commitments ~~period ended March 28, 2015, operating activities used net cash of $1,230,136 primarily as a result of the following:~~

(Most of our independent dealers finance their purchases under a) wholesale floor plan financing arrangement under which a ~~increase~~financial ininstitution ~~inventories~~provides ofthe ~~$845,502~~dealer (with a ~~use~~loan for the purchase price of ~~cash),~~the ~~primarily~~home and maintains a security interest in the home as collateral. When entering into a ~~result~~floor plan arrangement, the financial institution routinely requires that we enter into a separate repurchase agreement with the lender, under which we are obligated, upon default by the independent dealer, to repurchase the factory-built home at our original invoice price less the cost of administrative and shipping expenses. Our potential loss under a ~~return~~repurchase obligation depends upon the estimated net resale value of the home, as compared to ~~normal~~the repurchase ~~production~~price ~~levels~~that ~~subsequent~~we are obligated to ~~holiday~~pay. ~~shutdown~~This amount generally declines on a predetermined schedule over a period atthat ~~December~~usually ~~27,~~does ~~2014,~~not exceed 24 months.

~~(b)~~- a5 ~~decrease~~- ~~in income taxes payable of $263,453 (a use of cash), and~~

~~(c)~~The arisk ~~decrease~~of inloss ~~other~~that ~~accrued~~we ~~expenses~~face ofunder ~~$219,576~~these (arepurchase ~~use~~agreements ofis ~~cash),~~lessened ~~which~~by ~~were~~several ~~partially~~factors, including ~~offset~~the ~~by,~~following:

(di) anthe ~~increase~~sales ~~in accounts payable~~ of ~~$242,794~~our (aproducts ~~source~~are ofspread ~~cash),~~over ~~primarily~~a asnumber ~~the result~~ of aindependent ~~return to normal production levels subsequent to holiday shutdown period at December 27~~dealers, ~~2014.~~

2(ii) -historically ~~Cash~~we ~~flow~~have ~~from~~had ~~investing~~only ~~activities:~~isolated instances where we have incurred a repurchase obligation, although there is no guarantee that such historical trends will continue,

~~The~~(iii) ~~net~~the ~~cash~~price ~~used~~we inare ~~investing~~obligated ~~activities~~to ~~for~~pay ~~the~~under ~~three~~such ~~month~~repurchase ~~period~~agreements ~~ending~~declines ~~March 28,~~based ~~2015~~upon ~~was~~a ~~$4,227,~~predetermined ~~which~~amount ~~reflects~~over ~~capitalization~~a ~~of normal~~period ~~operating~~which ~~purchases~~usually ofdoes ~~equipment.~~not exceed 24 months, and

3(iv) -we ~~Cash~~have ~~flow~~been able to resell homes repurchased from ~~financing~~lenders ~~activities:~~at current market prices, although there is no guarantee that we will continue to be able to do so.

The ~~net~~maximum ~~cash~~amount ~~used~~for inwhich ~~financing~~the ~~activities~~Company ~~for~~is ~~the~~contingently ~~three~~liable ~~month~~under ~~period~~such ~~ending~~agreements ~~March~~amounted to approximately $7,990,000 as of June 27, 2015, as compared to $5,631,300 as of June 28, 2014. As of June 27, 2015 ~~was~~and June 28, 2014, we had reserves of $31239,~~400~~610 and $168,940, ~~which~~respectively, ~~reflects~~established ~~scheduled principal~~for ~~payments~~future repurchase commitments, based upon our prior experience and evaluation of ~~long-term~~our ~~debt~~independent dealers’ financial conditions. Deer Valley to date has not experienced any significant losses under these agreements; consequently, management does not expect any future losses to have a material effect on our accompanying financial statements.

~~The~~Allowance ~~Company~~loan isloss ~~contingently liable under the terms of the repurchase agreements with third party financial institutions providing inventory financing~~ for ~~retailers~~Inventory ofFinance ~~our~~Notes ~~products.~~Receivable ~~For more information on the repurchase agreements, including the Company’s contingent liability there under, please see “Reserve for Repurchase Commitments” below.~~

~~DVH,~~The ~~during~~Company offers inventory-secured financing for its ~~normal~~products ~~course~~to qualified retail dealers and developers. Finance contracts require periodic installments of ~~business,~~principal isand ~~required~~interest over periods of up to ~~provide~~24 ~~irrevocable~~months. ~~standby~~The ~~letters~~Company periodically evaluates the collectibility of ~~credit~~our notes receivable and considers the need to ~~cover~~establish an allowance for doubtful accounts based upon our historical ~~obligations~~collection ~~under~~experience. ~~its~~The ~~workers~~Company ~~compensation~~had ~~insurance~~a ~~policy~~total ininventory-secured ~~the~~financing ~~amount~~receivable of $654,~~000.~~397,199 Asas of ~~March~~June 2827, 2015 compared to $4,366,352 noas ~~amounts~~of ~~had~~June 28, ~~been~~2014. ~~drawn~~We onhave ~~the~~established ~~above~~an ~~irrevocable~~allowance ~~letters~~for loan losses of ~~credit~~$109,690 byas ~~the~~of June 27, ~~beneficiaries~~2015 and $131,210 at June 28, 2014.

~~Critical~~The ~~Accounting~~risk ~~Policies~~of loss that we face in connection with inventory-secured financing is lessened by several factors, including the following:

~~Our discussion~~(i) ~~and~~the ~~analysis~~financing offor our ~~financial~~products ~~condition and results of operations~~ are ~~based~~spread ~~upon~~over ~~our~~a ~~financial~~number ~~statements, which have been prepared in accordance with accounting principles generally accepted in the United States~~ of ~~America.~~independent ~~The preparation of these consolidated financial statements requires us to make estimates and judgments which affect the reported amounts of assets~~dealers, ~~liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. For a description of those estimates, see Note 2, Summary of~~

-(ii) 4historically -we have had only isolated instances where we have had our dealers default on floor plan financing, although there is no guarantee that such historical trends will continue, and

~~Table~~(iii) ofwe ~~Contents~~anticipate that we would be able to resell homes repossessed from dealers at current market prices, although there is no guarantee that we will be able to do so.

~~Significant~~Although ~~Accounting~~we ~~Policies,~~maintain ~~contained~~an inallowance ~~the explanatory notes to the Company’s unaudited financial statements~~ for ~~the~~loan ~~quarter ended March 28~~losses, ~~2015,~~there ~~contained~~can in this filing, and the Company’s Form 10-K for December 27, 2014. On an ongoing basis, we evaluate our estimates, including those related to reserves, deferred tax assets, valuation allowances, impairment of long-lived assets, fair value of equity instruments issued to consultants for services, and estimates of costs to complete contracts. We base our estimates on historical experience and on various other assumptions which we believe to be ~~reasonable~~no ~~under~~assurance ~~the~~that ~~circumstances,~~such ~~the~~allowance ~~results~~will ~~of which~~remain ~~form~~at ~~the~~current ~~basis~~levels ~~for making judgments about the carrying value of assets and liabilities which are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions~~ or ~~conditions.~~that ~~However, we~~such ~~believe~~allowances ~~that~~will ~~our~~be ~~estimates, including those for the above-described items, are reasonable~~adequate.

~~Critical~~Impairment ~~Accounting~~of ~~Estimates~~Long-Lived Assets

~~Management~~As ispreviously ~~aware~~discussed, ~~that~~the ~~certain~~factory-built ~~changes~~housing industry has experienced an overall market decline. Addressing the constriction of the retail housing market, in ~~accounting~~2008 ~~estimates~~the ~~employed~~Company idled its Sulligent, Alabama plant and thereafter consolidated its production operations at the Company’s larger plant located in ~~generating~~Guin, ~~financial~~Alabama. ~~statements~~In ~~can~~accordance ~~have~~with FASB Topic ASC 420 “Exit on Disposal Cost Obligations”, the ~~effect~~Company evaluates the carrying value of ~~making~~long-lived assets to be held and used when events and circumstances warrant such a review. The carrying value of long-lived assets is considered impaired when the ~~Company~~anticipated ~~look~~undiscounted ~~more~~cash orflow ~~less~~from ~~profitable~~such assets is less than itits ~~actually~~carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived assets. ~~Management~~Fair ~~believes~~market value is determined primarily using the ~~Company’s~~anticipated ~~estimates~~cash ~~are~~flows ~~reasonable~~discounted at a rate commensurate with the risk involved. ALosses ~~summary~~on long-lived assets to be disposed of are determined in a similar manner, except that the ~~most~~fair ~~critical~~market ~~accounting~~values ~~estimates~~are ~~employed~~primarily bybased on independent appraisals and preliminary or definitive contractual arrangements less costs to dispose. Based on our estimates of the ~~Company~~fair invalue ~~generating~~of ~~financial~~idled ~~statements~~facility ~~follows~~no ~~below~~impairment charges are required.

~~Warranties~~- 6 -

WeRevenue ~~provide~~Recognition our retail buyers with a one-year limited warranty covering defects in material or workmanship, including plumbing and electrical systems. We record a liability for estimated future warranty costs relating to homes sold, based upon our assessment of historical experience and industry trends. In making this estimate, we evaluate historical sales amounts, warranty costs related to homes sold and timing in which any work orders are completed. The Company has accrued a warranty liability reserve of $1,245,000 on its balance sheet as of March 28, 2015, as compared to $1,105,000 as of March 29, 2014. Based on management’s assessment of historical experience and current trends in wholesale shipments and dealer inventories we did not adjust our warranty provision for the quarter ended March 28, 2015. Although we maintain reserves for such claims, there can be no assurance that warranty expense levels will remain at current levels or that the reserves that we have set aside will continue to be adequate. A large number of warranty claims which exceed our current warranty expense levels could have a material adverse effect upon our results of operations.

~~Volume~~Revenue ~~Incentives~~for ~~Payable~~our products sold to independent dealers are generally recorded when all of the following conditions have been met: (i) an order for the home has been received from the dealer, (ii) an agreement with respect to payment terms has been received, and (iii) the home has been shipped and risk of loss has passed to the dealer and collectibility is reasonably assured.

WeThe ~~have~~Company ~~relied upon~~provides ~~volume~~limited ~~incentive~~inventory-secured ~~payments~~financing tofor ~~our~~its independent dealers ~~who retail our products~~. ~~These~~Products ~~volume~~shipped ~~incentive payments are accounted for as a reduction~~ to ~~gross~~dealers ~~sales,~~under ~~and~~the Company’s ~~are estimated and accrued when sales of our factory~~inventory-~~built~~secured ~~homes~~financing ~~are~~program ~~made to our independent dealers. Volume incentive reserves~~ are recorded ~~based~~by ~~upon~~ the ~~annualized~~Company ~~purchases~~as ofsales ~~our~~and ~~independent~~the dealers’ ~~who~~obligations ~~purchase a qualifying amount of home products from us. We accrue a liability~~ to ~~our~~the ~~dealers,~~Company ~~based~~are ~~upon~~reflected ~~estimates~~as ~~derived from~~inventory ~~historical~~finance ~~payout~~note ~~rates~~receivables. AsInterest ofon ~~March 28,~~inventory ~~2015~~finance ~~and~~note ~~March 29,~~receivables ~~2014,~~is recognized wein ~~had~~the aperiod ~~reserve~~that ~~for~~it ~~volume~~is ~~incentives payable of $187,587 and $205,329, respectively~~earned.

~~Reserve~~Recent ~~for~~accounting ~~Repurchase~~pronouncements ~~Commitments~~

~~Most of~~Recent ~~our~~accounting ~~independent~~pronouncements ~~dealers~~- ~~finance~~We ~~their~~have ~~purchases~~reviewed ~~under~~accounting apronouncements ~~wholesale~~and ~~floor~~interpretations ~~plan~~thereof ~~financing~~that ~~arrangement~~have ~~under~~effectiveness ~~which~~dates during ~~a financial institution provides~~ the ~~dealer~~periods ~~with~~reported ~~a loan for the purchase price of the home~~ and ~~maintains a security interest~~ in ~~the home~~future ~~as collateral~~periods. ~~When~~The ~~entering~~applicability ~~into~~of aany ~~floor~~standard ~~plan~~is ~~arrangement,~~subject ~~the financial institution routinely requires that we enter into a separate repurchase agreement with the lender, under which we are obligated, upon default by the independent dealer,~~ to ~~repurchase~~ the ~~factory-built~~formal ~~home~~review atof our ~~original~~financial ~~invoice~~management ~~price less the cost of administrative~~ and ~~shipping~~certain ~~expenses.~~standards ~~Our~~are ~~potential loss~~ under ~~a repurchase obligation depends upon the estimated net resale value of the home, as compared to the repurchase price that we are obligated to pay~~consideration. ~~This amount generally declines on a predetermined schedule over a period that usually does not exceed 24 months.~~

~~The~~From ~~risk~~time to time, new accounting pronouncements are issued by the FASB and other regulatory bodies that are adopted by the Company as of ~~loss~~the specified effective dates. Unless otherwise discussed, management believes that wethe ~~face~~impact ~~under~~of ~~these~~recently ~~repurchase~~issued ~~agreements~~standards, iswhich ~~lessened~~were byissued ~~several~~during ~~factors~~the periods reported herein, ~~including~~which are not yet effective, will not have a material impact on the Company’s ~~following:~~Consolidated Financial Statements upon adoption by the Company.

~~(i)~~Item ~~the~~4T. ~~sales~~Controls ofand ~~our products are spread over a number of independent dealers,~~Procedures

~~(ii)~~Evaluation ~~historically~~of weDisclosure ~~have~~Controls ~~had~~and ~~only~~Procedures ~~isolated instances where we have incurred a repurchase obligation, although there is no guarantee that such historical trends will continue,~~

The Company’s Chief Financial Officer, principal accounting officer and acting principal executive officer has evaluated the effectiveness of the Company’s disclosure controls and procedures (~~iii~~as defined in Rules 13a-15(e) and 15d-15(e) under the ~~price~~Exchange weAct) ~~are~~as ~~obligated~~of tothe ~~pay~~fiscal ~~under~~period ~~such~~ending ~~repurchase~~June 27, ~~agreements~~2015 ~~declines~~covered ~~based~~by this Quarterly Report on Form 10-Q. Based upon asuch evaluation, ~~predetermined~~the ~~amount~~Chief ~~over~~Financial aOfficer, principal accounting officer and acting principal executive officer has concluded that, as of the end of such period, ~~which~~the ~~usually~~Company’s ~~does~~disclosure controls and procedures were not ~~exceed~~effective 24as ~~months,~~required under Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

~~(iv)~~Changes wein ~~have~~Internal ~~been~~Controls ~~able~~over toFinancial ~~resell~~Reporting ~~homes repurchased from lenders at current market prices, although there is no guarantee that we will continue to be able to do so.~~

-During 5the -quarter ended June 27, 2015 there have been no changes in the Company’s internal control over financial reporting that have materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

~~Table~~Inherent Limitations of ~~Contents~~the Effectiveness of Disclosure and Internal Controls

~~The~~A ~~maximum~~control ~~amount~~system, ~~for~~no ~~which~~matter ~~the~~how ~~Company~~well isconceived ~~contingently~~and ~~liable~~operated, ~~under such agreements amounted to~~can ~~approximately~~provide $6only reasonable,~~990,000~~ asnot ~~of March 28~~absolute, ~~2015,~~assurance asthat ~~compared~~the toobjectives ~~$3,845,000 as~~ of ~~March 29,~~the ~~2014.~~disclosure Ascontrol ofsystem ~~March 28,~~or ~~2015~~internal ~~and~~control ~~March 29,~~system ~~2014,~~are wemet. ~~had~~Because ~~reserves~~ of ~~$209,695~~the ~~and~~inherent ~~$153,780,~~limitations ~~respectively,~~of ~~established~~any ~~for~~disclosure ~~future~~control ~~repurchase commitments,~~system ~~based~~or ~~upon~~internal ~~our~~control ~~prior~~system, ~~experience~~no ~~and~~ evaluation of ~~our~~controls ~~independent~~can ~~dealers’~~provide ~~financial~~absolute ~~conditions.~~assurance ~~Deer~~that ~~Valley~~all tocontrol ~~date~~issues, ~~has~~if ~~not experienced~~ any ~~significant losses under these agreements; consequently~~, ~~management~~within ~~does~~a ~~not~~company ~~expect any future losses to~~ have abeen ~~material effect on our accompanying financial statements~~detected.

~~Allowance~~- ~~loan~~7 ~~loss~~- ~~for Inventory Finance Notes Receivable~~

~~The~~PART ~~Company~~II ~~offers~~OTHER ~~inventory-secured~~INFORMATION financing for its products to qualified retail dealers and developers. Finance contracts require periodic installments of principal and interest over periods of up to 24 months. The Company periodically evaluates the collectibility of our notes receivable and considers the need to establish an allowance for doubtful accounts based upon our historical collection experience. The Company had a total inventory-secured financing receivable of $3,693,019 as of March 28, 2015 compared to $5,475,107 as of March 29, 2014. We have established an allowance for loan losses of $98,350 as of March 28, 2015 and $234,930 at March 29, 2014.

~~The~~Item ~~risk~~1. ofLegal ~~loss that we face in connection with inventory-secured financing is lessened by several factors, including the following:~~ Proceedings

~~(i)~~Although the ~~financing~~Company ~~for~~in ~~our~~the ~~products~~normal ~~are~~course ~~spread~~of ~~over~~business is subject to claims and litigation, the Company is not a ~~number~~party to any material legal proceeding nor is the Company aware of ~~independent~~any ~~dealers,~~circumstance which may reasonably lead a third party to initiate legal proceeding against the Company.

~~(ii)~~As ~~historically~~of wethe ~~have~~date ~~had~~of ~~only~~this ~~isolated~~filing, ~~instances~~there ~~where~~are weno ~~have~~material ~~had~~pending legal or governmental proceedings relating to our ~~dealers~~Company ~~default~~or onproperties ~~floor~~to ~~plan~~which we ~~financing~~are a party, ~~although~~and to our knowledge there isare no ~~guarantee~~material ~~that~~proceedings ~~such~~to ~~historical~~which ~~trends~~any ~~will~~of ~~continue~~our directors, ~~and~~executive officers, or affiliates are a party adverse to us or which have a material interest adverse to us.

~~(iii)~~Item we2. ~~anticipate~~Unregistered ~~that~~Sales weof ~~would~~Equity beSecurities ~~able~~and toUse ~~resell~~of ~~homes repossessed from dealers at current market prices, although there is no guarantee that we will be able to do so.~~Proceeds

~~Although~~Treasury weStock – ~~maintain~~Pursuant anto ~~allowance~~a ~~for~~common ~~loan~~stock ~~losses,~~repurchase ~~there~~program ~~can~~approved beby noour ~~assurance~~Board ~~that~~of ~~such~~Directors, ~~allowance~~there ~~will~~were ~~remain~~no attreasury ~~current~~stock ~~levels~~purchases orduring ~~that~~the ~~such allowances~~six ~~will~~month beperiod ~~adequate~~ended June 27, 2015.

~~Impairment~~Item of3. ~~Long-Lived~~Defaults ~~Assets~~Upon Senior Securities

~~As previously discussed, the factory-built housing industry has experienced an overall market decline~~None. Addressing the constriction of the retail housing market, in 2008 the Company idled its Sulligent, Alabama plant and thereafter consolidated its production operations at the Company’s larger plant located in Guin, Alabama. In accordance with FASB Topic ASC 420 “Exit on Disposal Cost Obligations”, the Company evaluates the carrying value of long-lived assets to be held and used when events and circumstances warrant such a review. The carrying value of long-lived assets is considered impaired when the anticipated undiscounted cash flow from such assets is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived assets. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that the fair market values are primarily based on independent appraisals and preliminary or definitive contractual arrangements less costs to dispose. Based on our estimates of the fair value of idled facility no impairment charges are required.

~~Revenue~~Item ~~Recognition~~4. Mine Safety Disclosures

~~Revenue~~None for our products sold to independent dealers are generally recorded when all of the following conditions have been met: (i) an order for the home has been received from the dealer, (ii) an agreement with respect to payment terms has been received, and (iii) the home has been shipped and risk of loss has passed to the dealer and collectibility is reasonably assured.

~~The Company provides limited inventory~~-~~secured~~ ~~financing~~8 ~~for its independent dealers. Products shipped to dealers under the Company’s inventory~~-~~secured~~ financing program are recorded by the Company as sales and the dealers’ obligations to the Company are reflected as inventory finance note receivables. Interest on inventory finance note receivables is recognized in the period that it is earned.

-Item 65. - Exhibits


Exhibit No.		Description

3.01		Articles of Incorporation of Deer Valley Corporation. (1)

3.02		Amended and Restated Bylaws of Deer Valley Corporation. (3)

4.01		Certificate of Designation, Rights, and Preferences of Series A Convertible Preferred Stock. (1)

4.02		Certificate of Designation, Rights, and Preferences of Series B Convertible Preferred Stock. (1)

4.03		Certificate of Designation, Rights, and Preferences of Series C Convertible Preferred Stock. (1)

4.04		Certificate of Designation, Rights, and Preferences of Series D Convertible Preferred Stock. (1)

4.05		Certificate of Designation, Rights, and Preferences of Series E Convertible Preferred Stock. (2)

31.01		Certification of Chief Financial Officer (as principal financial and accounting officer and acting principal executive officer) pursuant to Rule 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated August 11, 2015. (4)

32.01		Certification of Chief Financial Officer (as principal financial and accounting officer and acting principal executive officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated August 11, 2015. (4)

101.INS		XBRL Instance Document (4)

101.SCH		XBRL Taxonomy Extension Scheme Document (4)

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document (4)

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document (4)

101.LAB		XBRL Taxonomy Extension Label Linkbase Document (4)

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document (4)

~~Recent~~(1) ~~accounting~~Previously ~~pronouncements~~filed as an exhibit to the Form 8-K, filed with the SEC on July 28, 2006 and incorporated herein by reference.

~~Recent~~(2) ~~accounting~~Previously ~~pronouncements~~filed -as Wean ~~have~~exhibit ~~reviewed~~to ~~accounting pronouncements and interpretations thereof that have effectiveness dates during~~ the ~~periods~~ ~~reported~~Form ~~and~~10-QSB, infiled ~~future~~with ~~periods. The applicability of any standard is subject to~~ the ~~formal~~SEC ~~review~~on ofNovember ~~our~~20, ~~financial~~2006 ~~management~~ and ~~certain~~incorporated ~~standards~~herein ~~are~~by ~~under consideration.~~ reference

~~From~~(3) ~~time~~Previously tofiled ~~time, new accounting pronouncements are issued by the FASB and other regulatory bodies that are adopted by the Company~~ as ofan ~~the specified~~exhibit ~~effective~~to ~~dates. Unless otherwise discussed, management believes that~~ the ~~impact~~Form ~~of recently issued standards~~8-K, ~~which~~filed ~~have~~with ~~effectiveness dates during~~ the ~~periods~~SEC ~~reported~~on ofOctober ~~which are not yet effective~~7, ~~will~~2014 ~~not~~and ~~have~~incorporated aherein ~~material~~by ~~impact on the Company’s Consolidated Financial Statements upon adoption~~reference.

~~Item~~(4) ~~4T.~~Filed ~~Controls and Procedures~~herewith.

~~Evaluation~~- of9 ~~Disclosure~~- ~~Controls and Procedures~~

~~The~~SIGNATURE Company’s Chief Financial Officer, principal accounting officer and acting principal executive officer has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the fiscal period ending March 28, 2015 covered by this Quarterly Report on Form 10-Q. Based upon such evaluation, the Chief Financial Officer, principal accounting officer and acting principal executive officer has concluded that, as of the end of such period, the Company’s disclosure controls and procedures were not effective as required under Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

~~Changes~~Pursuant into ~~Internal~~the ~~Controls~~requirements ~~over~~of ~~Financial~~the ~~Reporting~~Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

During the quarter ended March 28, 2015 there have been no changes in the Company’s internal control over financial reporting that have materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.


	Deer Valley Corporation
	(Registrant)

Dated: August 11, 2015	By:	/s/ John S. Lawler
		John S. Lawler
		Chief Financial Officer
		(Principal Financial Officer and Accounting Officer and Acting Principal Executive Officer)

Inherent Limitations of the Effectiveness of Disclosure and Internal Controls

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure control system or internal control system are met. Because of the inherent limitations of any disclosure control system or internal control system, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected.

- 7 -

PART II OTHER INFORMATION

Item 1. Legal Proceedings

Although the Company in the normal course of business is subject to claims and litigation, the Company is not a party to any material legal proceeding nor is the Company aware of any circumstance which may reasonably lead a third party to initiate legal proceeding against the Company.

As of the date of this filing, there are no material pending legal or governmental proceedings relating to our Company or properties to which we are a party, and to our knowledge there are no material proceedings to which any of our directors, executive officers, or affiliates are a party adverse to us or which have a material interest adverse to us.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Treasury Stock – Pursuant to a common stock repurchase program approved by our Board of Directors, there were no treasury stock purchases during the three month period ended March 28, 2015.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None

- 8 -

Item 5. Exhibits

ExhibitNo.		Description
3.01		Articles of Incorporation of Deer Valley Corporation. (1)
3.02		Amended and Restated Bylaws of Deer Valley Corporation. (3)
4.01		Certificate of Designation, Rights, and Preferences of Series A Convertible Preferred Stock. (1)
4.02		Certificate of Designation, Rights, and Preferences of Series B Convertible Preferred Stock. (1)
4.03		Certificate of Designation, Rights, and Preferences of Series C Convertible Preferred Stock. (1)
4.04		Certificate of Designation, Rights, and Preferences of Series D Convertible Preferred Stock. (1)
4.05		Certificate of Designation, Rights, and Preferences of Series E Convertible Preferred Stock. (2)
31.01		Certification of Chief Financial Officer (as principal financial and accounting officer and acting principal executive officer) pursuant to Rule 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated May 12, 2015. (4)
32.01		Certification of Chief Financial Officer (as principal financial and accounting officer and acting principal executive officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated May 12, 2015. (4)
101.INS		XBRL Instance Document (4)
101.SCH		XBRL Taxonomy Extension Scheme Document (4)
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document (4)
101.LAB		XBRL Taxonomy Extension Label Linkbase Document (4)
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document (4)

(1) Previously filed as an exhibit to the Form 8-K, filed with the SEC on July 28, 2006 and incorporated herein by reference.

(2) Previously filed as an exhibit to the Form 10-QSB, filed with the SEC on November 20, 2006 and incorporated herein by reference

(3) Previously filed as an exhibit to the Form 8-K, filed with the SEC on October 7, 2014 and incorporated herein by reference.

(4) Filed herewith.

- 9 -

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Deer Valley Corporation
	(Registrant)
Dated: May 12, 2015		By:	/s/ John S. Lawler
		John S. Lawler Chief Financial Officer (Principal Financial Officer and Accounting Officer and Acting Principal Executive Officer)

- 10 -

Table of Contents

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Table of Contents

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Filing Compare · DEER VALLEY CORP