Attached files

file filename
EX-14 - CODE OF ETHICS - CHASE GENERAL CORPd235723dex14.htm
EX-32.1 - SECTION 906 CERTIFICATION - CHASE GENERAL CORPd235723dex321.htm
EX-31.1 - SECTION 302 CERTIFICATION - CHASE GENERAL CORPd235723dex311.htm
Table of Contents

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

 

x Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Fiscal Year Ended June 30, 2011

 

¨ Transaction Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For transition period from             to                

Commission File Number: 2-5916

Chase General Corporation

(Exact name of registrant as specified in its charter)

 

                  Missouri                              36-2667734        
(State or other jurisdiction of   (I.R.S. Employer

incorporation or organization)

  Identification Number)
1307 South 59th, St. Joseph, Missouri           64507        
(Address of Principal Executive Offices)   Zip Code

(816) 279-1625

(Registrant’s telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:

None

Securities Registered Pursuant to Section 12(g) of the Act:

None

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes  [  ]    No  [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes  [  ]    No  [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes  [X]    No  [  ]

Indicate by check mark whether the registrant (1) has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  [  ]    No  [  ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer  [  ]

   Accelerated filer  [  ]    Non-accelerated filer    [  ]    Smaller reporting company  [X]

Indicate by check mark whether the registrant is a shell Company (as defined in Rule 12b-2 of the Exchange Act).

Yes  [  ]     No  [X]

The aggregate market value of the shares of common stock held by non-affiliates of the Issuer is not actively traded. Therefore, market value of the stock is unknown as of 60 days prior to the date of this filing.

As of September 15, 2011 there were 969,834 shares of Common Stock $1.00 par value, outstanding.


Table of Contents

CHASE GENERAL CORPORATION

ANNUAL REPORT ON FORM 10-K

For the Year Ended June 30, 2011

TABLE OF CONTENTS

 

PART I

    

Item 1.

  Business.      3   

Item 1A.

  Risk Factors      6   

Item 1B.

  Unresolved Staff Comments      6   

Item 2.

  Property      7   

Item 3.

  Legal Proceedings      7   

Item 4.

  Submission of Matters to a Vote of Security Holders      7   

PART II

    

Item 5.

  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities      8   

Item 6.

  Select Financial Data      8   

Item 7.

  Management’s Discussion and Analysis of Financial Conditions and Results of Operations      9   

Item 7A.

  Quantitative and Qualitative Disclosures About Market Risk      16   

Item 8.

  Consolidated Financial Statements and Supplementary Data      16   

Item 9.

  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure      35   

Item 9A(T)

  Controls and Procedures      35   

Item 9B.

  Other Information      35   

PART III

    

Item 10.

  Directors, Executive Officers, and Corporate Governance      36   

Item 11.

  Executive Compensation      37   

Item 12.

  Security Ownership of Certain Beneficial Owners and Management      39   

Item 13.

  Certain Relationships and Related Transactions, and Director Independence      40   

Item 14.

  Principal Accountant Fees and Services      40   

PART IV

    

Item 15.

  Exhibits and Financial Statement Schedules      41   

SIGNATURES

     42   

 

2


Table of Contents

PART I

This report contains certain “forward-looking statements” concerning the Company’s operations, economic performance and financial condition, which are subject to inherent uncertainties and risks. Actual results could differ materially from those anticipated in this report. When used in this report, the word “estimate,” “project,” “anticipate,” “expect,” “intend,” “believe,” and similar expressions are intended to identify forward-looking statements.

 

Item 1 BUSINESS

Chase General Corporation was incorporated November 6, 1944 for the purpose of manufacturing confectionery products. In 1970, Chase General Corporation acquired a 100% interest in its wholly-owned subsidiary, Dye Candy Company. (Chase General Corporation and Dye Candy Company are sometimes referred herein as “the Company”). This subsidiary is the main operating company for the reporting entity.

PRINCIPAL PRODUCTS AND SERVICES AND METHODS OF DISTRIBUTION

The subsidiary, Dye Candy Company, operates two divisions, Chase Candy Products and Seasonal Candy Products. Chase Candy Products involve production and sale of a candy bar marketed under the trade name “Cherry Mash”. The Seasonal Candy Products involve production and sale of coconut, peanut, chocolate, and fudge confectioneries. The products of both divisions are sold to the same type of customers in the same geographical areas. In addition, both divisions share a common labor force and utilize the same basic equipment and raw materials. Therefore, segment reporting for the two divisions is not maintained by Management and, accordingly, is not available for inclusion in this filing.

The principal products produced are as follows:

Chase Candy Products of Dye Candy Company produces a candy bar under the trade name of “Cherry Mash”. The bar is distributed in six case sizes:

 

  (1) 60 count pack
  (2) 12 boxes of 24 bars per box
  (3) 200 count shipper box
  (4) 100 count shipper box
  (5) 100 # 2 box Counter Display
  (6) 4 box - 36 count Counter Display

In addition to the regular size bar, a “mini-mash” is distributed in seven case sizes:

 

  (1) 24 - 12 oz. bags
  (2) 6 jars - 60 bars per jar
  (3) 23 # wrapped bars
  (4) 22 # unwrapped bars
  (5) 12 - 12 oz. bags
  (6) 6 - 4 # jars
  (7) 24 - 12 oz. clamshell containers

 

3


Table of Contents

DESCRIPTION OF BUSINESS (CONTINUED)

 

Seasonal Candy Products of Dye Candy Company produces coconut, peanut, chocolate, and fudge confectioneries. These products are distributed in bulk or packaged. Principal products include:

 

 

(1) Coconut Bon-Bons

     (6) Peanut Brittle
 

(2) Coconut Stacks

     (7) Peanut Clusters
 

(3) Home Style Poe Fudge

     (8) Champion Crème Drops
 

(4) Peco Flake

     (9) Jelly Candies
 

(5) Peanut Squares

   (10) Frosted Pretzels

The Champion Creme Drops, Frosted Pretzels and Jelly Candies are not produced by the Company, but repackaged for wholesale distribution.

All products are shipped to customers by commercial haulers.

COMPETITION AND MARKET AREA

The Chase Candy Division bars are sold primarily to wholesale candy and tobacco jobbing houses, grocery accounts, vendors and repackers. “Cherry Mash” bars are marketed in the Midwest region of the United States. For the years ended June 30, 2011 and 2010, this division accounted for 55% and 58%, respectively, of the consolidated revenue of Dye Candy Company.

The Seasonal Candy Division is sold primarily on a Midwest regional basis to national syndicate accounts, repackers, and grocery accounts. For the years ended June 30, 2011 and 2010, the division accounted for 45% and 42%, respectively, of the consolidated revenue of Dye Candy Company. The Company has no government contracts, foreign operations or export sales. In addition, all domestic sales are primarily in the Midwest region of the United States.

The Company is a seasonal business whereby the largest volume of sales occur in the spring and fall of each year. The net income per quarter of the Company varies in direct proportion to the seasonal sales volume.

Due to the seasonal nature of the business, there is a heavier demand on working capital in the winter and summer months of the year when the Company is building its inventories in anticipation of fall and spring sales. The fluctuation of demand on working capital due to the seasonal nature of the business is common to the confectionery industry. If necessary, the Company has the ability to borrow short-term funds in early fall to finance operations prior to receiving cash collections from fall sales. The Company occasionally offers extended payment terms of up to sixty days. Since this practice is infrequent, the effect on working capital is minimal.

(Continued)

 

4


Table of Contents

COMPETITION AND MARKET AREA (CONTINUED)

 

Prompt, efficient service are traits demanded in the confectionery industry, which results in a continual low volume of back-orders. Therefore, at no time during the year does the Company have a significant amount of back-orders.

The confectionery market for the type of product produced by the divisions of Dye Candy Company is very competitive and quality minded. The confectionery (candy) industry in which the divisions operate is highly competitive with many small companies and, within certain specialized areas, a few competitors dominate. In the United States, the dominant competitors in the coconut candy industry are Crown Candy Company, Vermico Candy Company, and the Seasonal Candy Division of Dye Candy Company with approximately 70% of the market share among them. In the United States, Old Dominion has approximately 80% of the market share of the peanut candy business in which the Seasonal Candy Division operates. Dye Candy Company sells approximately 95% of its products in the Midwest region with seasonal orders being shipped to the Southern and Eastern regions of the United States. Except for the coconut candy industry, Dye Candy Company is not a dominant competitor in any of the candy industries in which it competes. Dye Candy Company’s market share in the coconut industry does not vary significantly from year to year.

Principal methods of competition the Company uses include quality of product, price, reduced transportation costs due to central location, and service. The Company’s competitive position is positively influenced by labor costs being lower than industry average. Chase General Corporation is firmly established in the confectionery market and through its operating divisions has many years of experience associated with its name.

RESEARCH AND DEVELOPMENT

The Company has not developed any new products during fiscal years ending June 30, 2011 and 2010.

RAW MATERIALS AND PRINCIPAL SUPPLIERS

Raw materials and packaging materials are produced on a national basis with products coming from throughout the United States. Raw materials and packaging materials are generally widely available, depending of course, on common market influences.

PATENTS AND TRADEMARKS

The largest single revenue producing product, the “Cherry Mash” bar, is protected by a trademark registered with the United States Government Patents Office. The Company considers this trademark very important to the Company. This trademark expires in the year 2013. The Company and its legal representatives do not expect any impediment to renewing this trademark prior to its expiration.

 

5


Table of Contents

EMPLOYEES

As of June 30, 2011, the Company had 21 full time employees. There were 13 in manufacturing, 2 in maintenance, 1 plant manager, 1 1/2 in sales and marketing, 2 1/2 in finance and administration, and 1 in general office. This expands to approximately 31 full time personnel during the two busy production seasons of spring and fall.

CUSTOMERS

For the years ending June 30, 2011 and 2010, Associated Wholesale Grocers accounted for 31% and 22% of gross sales, and 36% and 8%, respectively, of accounts receivable. For the years ending June 30, 2011 and 2010, Wal-Mart and its affiliates accounted for 12% and 17%, respectively of gross sales, and 16% and 44%, respectively, of accounts receivable. No other customer accounted for more than 10% of the Company’s revenues in fiscal years 2011 and 2010.

ENVIRONMENTAL PROTECTION AND THE EFFECT ON PROBABLE GOVERNMENT REGULATIONS ON THE BUSINESS

To the best of management’s knowledge, the Company is presently in compliance with all environmental laws and regulations and does not anticipate any future expenditures in this regard.

NEED FOR GOVERNMENT APPROVAL OF PRINCIPAL PRODUCTS OR SERVICES

The Company is required to meet the FDA guidelines for proper labeling of its products and for contents of its products.

REPORTS TO SECURITY HOLDERS

The Registrant is not required to send the annual audit report, annual 10-K report and quarterly 10-Q reports to security holders since the stock is not actively traded. These reports are available at the Registrant’s registered office or they are available on-line on the SEC’s EDGAR website.

 

Item 1A RISK FACTORS

Not applicable to smaller reporting company.

 

Item 1B UNRESOLVED STAFF COMMENTS

The Company has no unresolved SEC staff comments at June 30, 2011.

 

6


Table of Contents
Item 2 PROPERTY

We conduct our operations from two buildings as follows:

Chase Warehouse - This building located in St. Joseph, Missouri is owned by Dye Candy Company, a wholly-owned subsidiary of the registrant. The facility is currently devoted entirely to the storage of supplies, and the warehousing and shipping of candy products. This warehouse is over seventy years old and is in fair condition and adequate to meet present requirements. The warehouse has approximately 15,000 square feet and is not encumbered.

Chase General Office and Dye Candy Company Operating Plant - The building located at 1307 South 59th, St. Joseph, Missouri contains the general offices (of approximately 2,000 square feet) for Chase General Corporation, Dye Candy Company and its divisions. The production plant of Dye Candy Company occupies the remainder of the building or 18,000 square feet. The building, specifically designed for the Company, is leased from an entity owned by the Vice-President and Director of the Company and his spouse. The annual rental of this facility was $78,000 for each year ended June 30, 2011 and 2010.

The net book value of our premises, land and office, and production equipment was $497,909 and $512,069, respectively, for fiscal years ending June 30, 2011 and 2010.

We believe both facilities are adequately covered by insurance.

 

Item 3 LEGAL PROCEEDINGS

None

 

Item 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of the Company’s security holders during the fourth quarter of the fiscal year ended June 30, 2011.

 

7


Table of Contents

PART II

 

Item 5 MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market information

There is no established public trading market for the common stock (par value $1 per share) of the Company.

Security holders

As of September 15, 2011, the latest practicable date, the approximate number of record holders of common stock was 1,869, including individual participants in security listings.

Dividends

 

  (1) Dividend history and restrictions

No dividends have been paid during the past two fiscal years and there are no dividend restrictions. Preferred stock dividends in arrears are accumulated.

 

  (2) Dividend policy

There is no set policy on the payment of dividends due to the financial condition of the Company and other factors. It is not anticipated that cash dividends will be paid in the foreseeable future.

Securities authorized for issuance under equity compensation plans

The Company does not have any equity compensation plans.

 

Item 6 SELECT FINANCIAL DATA

Not applicable to a smaller reporting company.

 

8


Table of Contents
Item 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This report contains statements that plan for or anticipate the future. Forward-looking statements may include statements about the future of our products and the industry, statements about our future business plans and strategies, and other statements that are not historical in nature. In this report, forward-looking statements are generally identified by the words “anticipate,” “plan,” “believe,” “expect,” “estimate,” and the like. Readers should carefully review these cautionary statements as they identify certain important factors that could cause actual results to differ materially from those in the forward-looking statements and from historical trends. These forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by the Company at the time the statements are made. These expectations, assumptions and uncertainties include: the Company’s expectation of heavier demand on working capital in the summer and winter months in anticipation of fall and spring sales; our belief that the Company has stabilized its customer base; will continue our efforts to expand the existing market area and increase sales to customers; and maintain tight control of all expenditures.

OVERVIEW

During fiscal year ended 2011, the Company’s net sales were $2,996,319, as compared to net sales of $2,940,935 for fiscal year ended June 30, 2010. This 1.9% increase in volume offset by a 4.1% increase in cost of sales resulted in decreased profitability during the year, as reflected in net income before income taxes of $14,748 for fiscal year 2011 compared to $177,816 for fiscal year 2010. Working capital increased $14,893 to $557,964 for the current year from $543,071 for the fiscal year 2010 due to an increase in inventory offset by a decrease in cash and an increase in accounts payable.

The following information should be read together with the consolidated financial statements and notes thereto included elsewhere herein.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

GENERAL

Management’s discussion and analysis of financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of these consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

9


Table of Contents

GENERAL (CONTINUED)

 

The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.

REVENUE RECOGNITION

The Company recognizes revenues as product is shipped to customers. Net sales are comprised of the total sales billed during the period less the estimated returns, customer allowances, and customer discounts.

RECEIVABLES

Accounts receivable are uncollateralized customer obligations which generally require payment within thirty days from the invoice date. Accounts receivable are stated at the invoice amount as no interest is charged to the customer for any past due amounts. Payments of accounts receivable are applied to the specific invoices identified on the customer’s remittance advice or, if unspecified, to the earliest unpaid invoices.

The carrying amount of accounts receivable is reduced by a valuation allowance that reflects management’s best estimate of amounts that will not be collected. The allowance for doubtful accounts is based on management’s assessment of the collectability of specific customer accounts and the aging of the accounts receivable. If there is a deterioration of a major customer’s credit worthiness or actual defaults are higher than the historical experience, management’s estimates of the recoverability of amounts due the Company could be adversely affected. All accounts or portions thereof deemed to be uncollectible, or to require an excessive collection cost, are written off to the allowance for doubtful accounts.

INVENTORIES

Inventories are carried at the “lower of cost or market value,” with cost being determined on the “first-in, first-out” basis of accounting. Finished goods and goods in process include a provision for manufacturing overhead.

IMPAIRMENT OF LONG-LIVED ASSETS

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amounts of such assets to future net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceed the fair value of the assets.

 

10


Table of Contents

RESULTS OF OPERATIONS

The following table sets forth for the years indicated, the percentage of net sales of certain items in the Company’s consolidated statements of operations for each of the fiscal years ended June 30, 2011 and 2010, respectively:

 

     2011     2010  

Net sales

     100.00     100.00

Cost of sales

     73.29        71.70   
  

 

 

   

 

 

 

Gross profit

     26.71        28.30   

Selling expense

     12.88        11.13   

General and administrative expense

     13.09        10.99   
  

 

 

   

 

 

 

Income from operations

     .74        6.18   

Other income (expense), net

     (.25     (.13
  

 

 

   

 

 

 

Income before income taxes

     .49        6.05   

Provision for (benefit from) income taxes

     .18        2.41   
  

 

 

   

 

 

 

Net income

     .31        3.64   

Preferred dividends

     (4.27     (4.35
  

 

 

   

 

 

 

Income (loss) applicable to common stockholders

     (3.96 )%      (.71 )% 
  

 

 

   

 

 

 

FISCAL YEAR 2011 COMPARED TO FISCAL YEAR 2010

NET SALES

During the year ended June 30, 2011, sales, net of returns and allowances, increased $55,384 or 1.88% as compared to the year ended June 30, 2010. Gross sales for Chase Candy products decreased $50,980 or 2.96% to $1,673,979 for the year ended June 30, 2011 compared to $1,724,959 for 2010. Gross sales for seasonal candy increased $149,391 or 11.92% to $1,402,649 for the year ended June 30, 2011 as compared to $1,253,258 for 2010.

The 2.96% decrease in gross sales of Chase Candy of $50,980 for the year ended June 30, 2011 over the same period ended June 30, 2010, is primarily due to the discontinuation of the Mini Mash Limited Edition Tin and decreased orders of the Cherry Mash Bar to two customers offset by increased sales to Cherry Mash merchandisers. The 11.92% increase in gross sales of Seasonal Candy of $149,391 for the year ended June 30, 2011 over the same period ended June 30, 2010, is primarily due to increased orders from two customers.

The Company’s returns and allowances increased $492 or 3.30% for the year ended June 30, 2011, compared to the year ended June 30, 2010.

 

11


Table of Contents

COST OF SALES

Cost of sales for the year ended June 30, 2011, as compared to the year ended June 30, 2010, increased by 4.14%. The cost of sales increased $87,308 to $2,196,051 while increasing to 73.29 % of related revenues for the year ended June 30, 2011, compared to $2,108,743 or 71.70% of related revenues for the year ended June 30, 2010.

The dollar increase in cost of sales for the year ended June 30, 2011 was the result of raw material costs of $1,169,620 increasing 20.90% or $202,206 for year ended June 30, 2011, as compared to $967,413 for year ending 2010. This increase is primarily due to raw material price increases in chocolate, peanuts, and sugar which were not passed along to customers.

Labor costs including wages, vacation pay and payroll taxes of $440,419 for the year ended June 30, 2011 increased 1.52% or $6,576 as compared to $433,663 for the period ending 2010. The increase was due to increased production.

GROSS PROFIT

The gross margin decreased 3.84% or $31,924 to $800,268 decreasing to 26.71% of related revenues for the year ended June 30, 2011, as compared to $832,192 or 28.3% of related revenues for the year ended June 30, 2010, as a result of the overall increase in cost of sales.

Finished goods inventory as of June 30, 2011 of $263,934 increased $159,912 or 153.73% from the June 30, 2010 finished goods inventory of $104,022. This increase was due to building up inventory when the plant closed for vacation the first of July and the start of the busy season beginning at an earlier date in 2011. In 2010, a new wrapper machine had not been installed in time to start at an earlier date. Raw materials inventory as of June 30, 2011 of $88,490 decreased $20,537 or 18.84% of the June 30, 2010 raw materials inventory of $109,027. This decrease was due to building up a larger finished goods inventory for the start of an earlier busy season.

SELLING EXPENSES

Selling expenses for the year ended June 30, 2011 increased $58,605 to $386,019, which is 17.90% of sales, compared to $327,413 or 11.13% of sales for the year June 30, 2010. This increase is primarily due to higher commissions and premium promotions being paid, and sample costs for the period in an effort to increase sales volume. Commissions and premium promotions, and sample costs increased $44,873 or 28.98% to $199,701 for the year ended June 30, 2011, as compared to $154,828 for the year ending June 31, 2010.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses for the year ended June 30, 2011 increased $68,944 to $392,164, which is 13.09% of sales, compared to $323,221 or 10.99% of sales for the year ended June 30, 2010. The increased costs are primarily because of increases in employee health insurance, directors insurance, and enhancement costs made to the Company’s website.

 

12


Table of Contents

INCOME FROM OPERATIONS

Income from operations for the year ended June 30, 2011 was 0.74% of net sales, as compared to 6.18% of net sales for the year ended June 30, 2010 for the reasons described above.

OTHER INCOME (EXPENSE)

Other income and (expense) reflects expense of $(7,837) for the year ended June 30, 2011, as compared to expense of $(1,903) for the year ended June 30, 2010. This increase of $5,934 was primarily due to increased interest expense due to financing activities during the year ended June 30, 2010.

INCOME BEFORE INCOME TAXES

Income before income taxes was $14,748 for the year ended June 30, 2011, as compared to $177,816 for the year ended June 30, 2010. The reasons for the decrease of $163,068 have been discussed above.

PROVISION FOR INCOME TAXES

The Company recorded a tax expense for the year ended June 30, 2011 of $5,401, as compared to a tax expense of $70,867 for the year ended June 30, 2010. The tax expense for the year ended June 30, 2011 is a result of operations discussed above.

NET INCOME

Net income for the year ended June 30, 2011 was $9,347, compared to net income for the year ended June 30, 2010 of $106,949. This decrease of $97,602 is the result of those items discussed above.

PREFERRED DIVIDENDS

Preferred dividends were $128,072 for the years ended June 30, 2011 and 2010, which reflect additional preferred stock dividends in arrears on the Company’s Series A and Series B $5 par value preferred stock and its Series A & B $20 par value preferred stock.

NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS

Net (loss) applicable to common stockholders was $(118,725) for the year ended June 30, 2011, which is an increase of $97,602 as compared to net loss of $(21,123) for the year ended June 30, 2010 for the reasons discussed above.

 

13


Table of Contents

LIQUIDITY AND SOURCES OF CAPITAL

The table below presents the summary of cash flow for the fiscal year indicated.

 

     2011     2010  

Net cash provided by operating activities

   $     32,643      $     203,958   

Net cash used in investing activities

   $ (32,988   $ (260,770

Net cash provided by (used in) financing activities

   $ (87,391   $ 134,549   

Operating Activities

The positive cash flow of $32,643 generated from operations is a result of the Company continuing to monitor raw material pricing, and when a price increase or decrease is anticipated, adjustments to inventory levels are made accordingly. Finished goods inventory as of June 30, 2011 of $263,934 increased $159,912 or 153.73% of the June 30, 2010 finished goods inventory of $104,022. This increase was due to building up inventory for when the plant closed for vacations the first of July and the start of the busy season beginning at an earlier date in 2011. In 2010, a new wrapper machine was not installed in time to start at an earlier date. Raw materials inventory as of June 30, 2011 of $88,490 decreased $20,537 or 18.84% of the June 30, 2010 raw materials inventory of $109,027. This decrease was due to building up a larger finished goods inventory for the start of an earlier busy season.

Investing Activities

The $32,988 of cash used in investing activities was the net result of capital expenditures and disposal of equipment for the current fiscal year. The Company continues to write off equipment that is no longer useful to the operations of the Company. Machinery and equipment purchases of $33,488 and $260,770 were made during the years ended June 30, 2011 and 2010, respectively. Depending on results of operations and cash flows, the Company has plans to replace two cookers at an anticipated cost of $40,000 in the next several years, with no set target date. Equipment purchased for the 2010 year includes the acquisition of a new mini mash wrapper machine for $249,161.

Financing Activities

The Company borrowed $40,000 and $210,000, respectively, on its line-of-credit during the fall of 2010 and 2009 busy seasons. Payments of $40,000 and $210,000, respectively, were paid for years ending June 30, 2011 and 2010. The Company renewed its $250,000 line-of-credit until January 3, 2012.

The Company financed $71,750 of vehicle purchases during fiscal year 2011.

The Company financed $163,909, a portion of the mini mash wrapper machine acquired during fiscal year 2010.

Loan payments were $87,391 and $29,360 for years ended June 30, 2011 and 2010, respectively.

 

14


Table of Contents

Overall cash and cash equivalents decreased $87,736 to $18,772 at June 30, 2011 from $106,508 at June 30, 2010.

At June 30, 2011, the Company’s accumulated deficit was $5,663,710, compared to accumulated deficit of $5,673,057 as of June 30, 2010. Working capital as of June 30, 2011 increased 2.74% to $557,964 from $543,071 as of June 30, 2010.

The Company’s lease on its office and plant facility is effective through March 31, 2025 with an option to extend for an additional time of five years, and currently requires payments of $6,500 per month. At the end of the first five years, the base rent shall be increased an amount not greater than 30%, at the sole discretion of lessor and for each additional term of five years. The facility is leased from an entity owned 100% by the Vice-President and Director and his spouse.

In order to maintain funds to finance operations and meet debt obligations, it is the intention of management to continue its efforts to expand the present market area and increase sales to its customers. Management also intends to continue tight control on all expenditures.

There has been no material impact from inflation and changing prices on net sales and revenues, or on income from continuing operations for the last two fiscal years.

IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS

During the third quarter 2010, Chase adopted FASB ASU No. 2010-06 Fair Value Measurements and Disclosures (Topic 820). This ASU requires new disclosures for transfers in and out of Levels 1 and 2, and Activity in Level 3 fair value measurements. The update also clarifies the level disaggregation and disclosures about inputs and valuation techniques. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009. The requirement related to Level 3 fair value measurements is effective for the Company for interim and annual reporting periods beginning after January 29, 2011. The adoption of the effective portions of this new standard did not have a material impact on the Company’s condensed consolidated financial statements and the Company does not expect a material impact on its condensed consolidated financial statements related to the Level 3 fair value disclosures.

In June 2009, the FASB issued new guidance on the consolidation of variable interest entities (“VIE”) in response to concerns about the application of certain key provision of pre-existing guidance, including those regarding the transparency of the involvement with a VIE. Specifically, this new guidance requires a qualitative approach to identifying a controlling financial interest in a VIE and requires ongoing assessment of whether an interest in a VIE makes the holder the primary beneficiary of the VIE and whether an entity is a VIE when a triggering event occurs. In addition, this new guidance requires additional disclosures about the involvement with a VIE and any significant changes in risk exposure due to that involvement. This new guidance is effective for fiscal years beginning after November 15, 2009. The Company adopted the new guidance in the first quarter of fiscal year 2011, which did not have a material impact on its condensed consolidated financial statements.

 

15


Table of Contents
Item 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable to a smaller reporting company.

 

Item 8 CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Consolidated Financial Statements meeting the requirements of Regulation S-B are contained on pages 17 through 34 of this Form 10-K.

 

16


Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

CONSOLIDATED FINANCIAL REPORT

Table of Contents

 

     PAGE  

Report of Independent Registered Public Accounting Firm

     18   

Financial Statements

  

Consolidated Balance Sheets

     19   

Consolidated Statements of Operations

     21   

Consolidated Statements of Stockholders’ Equity

     22   

Consolidated Statements of Cash Flows

     23   

Notes to Consolidated Financial Statements

     24   

 

17


Table of Contents

LOGO

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

CHASE GENERAL CORPORATION AND SUBSIDIARY

We have audited the accompanying consolidated balance sheets of Chase General Corporation and Subsidiary (the “Company”) as of June 30, 2011 and 2010, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Chase General Corporation and Subsidiary as of June 30, 2011 and 2010, and the consolidated results of their operations and their cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

/s/ Mayer Hoffman McCann P.C

MAYER HOFFMAN MCCANN P.C.

Leawood, Kansas

September 22, 2011

 

18


Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

June 30, 2011 and 2010

ASSETS

 

    

2011

    

2010

 

CURRENT ASSETS

     

Cash and cash equivalents

   $ 18,772       $ 106,508   

Trade receivables, net of allowance for doubtful accounts, of $15,383 and $14,891, respectively

     161,670         164,753   

Inventories:

     

Finished goods

     263,934         104,022   

Goods in process

     3,275         3,730   

Raw materials

     88,490         109,027   

Packaging materials

     188,025         186,420   

Prepaid expenses

     5,047         4,959   

Deferred income taxes

     6,900         5,844   
  

 

 

    

 

 

 

Total current assets

     736,113         685,263   
  

 

 

    

 

 

 

PROPERTY AND EQUIPMENT

     

Land

     35,000         35,000   

Buildings

     85,738         85,738   

Machinery and equipment

     1,025,118         1,029,093   

Trucks and autos

     173,486         139,601   

Office equipment

     37,757         37,027   

Leasehold improvements

     71,481         71,481   
  

 

 

    

 

 

 

Total

     1,428,580         1,397,940   

Less accumulated depreciation

     930,671         885,871   
  

 

 

    

 

 

 

Total property and equipment

     497,909         512,069   
  

 

 

    

 

 

 

TOTAL ASSETS

   $   1,234,022       $   1,197,332   
  

 

 

    

 

 

 

The accompanying notes are an integral part of the

consolidated financial statements.

 

19


Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

June 30, 2011 and 2010

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

2011

   

2010

 

CURRENT LIABILITIES

    

Accounts payable

   $ 104,796      $ 68,734   

Current maturities of notes payable

     54,844        56,820   

Accrued expenses

     17,210        15,337   

Deferred income

     1,299        1,299   

Income taxes payable

     -          2   
  

 

 

   

 

 

 

Total current liabilities

     178,149        142,192   
  

 

 

   

 

 

 

LONG-TERM LIABILITIES

    

Deferred income

     16,558        17,857   

Notes payable, less current maturities

     136,810        150,475   

Deferred income taxes

     100,219        93,869   
  

 

 

   

 

 

 

Total long-term liabilities

     253,587        262,201   
  

 

 

   

 

 

 

Total liabilities

     431,736        404,393   
  

 

 

   

 

 

 

COMMITMENTS AND CONTINGENCIES

    

STOCKHOLDERS’ EQUITY

    

Capital stock issued and outstanding:

    

Prior cumulative preferred stock, $5 par value:

    

Series A (liquidation preference $2,100,000 and $2,070,000 respectively)

     500,000        500,000   

Series B (liquidation preference $2,055,000 and $2,025,000 respectively)

     500,000        500,000   

Cumulative preferred stock, $20 par value

    

Series A (liquidation preference $4,785,065 and $4,726,533 respectively)

     1,170,660        1,170,660   

Series B (liquidation preference $779,821 and $770,281 respectively)

     190,780        190,780   

Common stock, $1 par value

     969,834        969,834   

Paid-in capital in excess of par

     3,134,722        3,134,722   

Accumulated deficit

     (5,663,710     (5,673,057
  

 

 

   

 

 

 

Total stockholders’ equity

     802,286        792,939   
  

 

 

   

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

   $     1,234,022      $     1,197,332   
  

 

 

   

 

 

 

The accompanying notes are an integral part of the

consolidated financial statements.

 

20


Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended June 30, 2011 and 2010

 

    

2011

   

2010

 

NET SALES

   $     2,996,319      $     2,940,935   

COST OF SALES

     2,196,051        2,108,743   
  

 

 

   

 

 

 

Gross profit on sales

     800,268        832,192   
  

 

 

   

 

 

 

OPERATING EXPENSES

    

Selling

     386,019        327,413   

General and administrative

     392,164        323,221   

(Gain) loss on sale of equipment

     (500     1,839   
  

 

 

   

 

 

 

Total operating expenses

     777,683        652,473   
  

 

 

   

 

 

 

Income from operations

     22,585        179,719   
  

 

 

   

 

 

 

OTHER INCOME (EXPENSE)

    

Miscellaneous income

     2,341        2,224   

Interest (expense)

     (10,178     (4,127
  

 

 

   

 

 

 

Total other income (expense)

     (7,837     (1,903
  

 

 

   

 

 

 

Net income before income taxes

     14,748        177,816   

PROVISION FOR INCOME TAXES

     5,401        70,867   
  

 

 

   

 

 

 

NET INCOME

     9,347        106,949   

Preferred dividends

     (128,072     (128,072
  

 

 

   

 

 

 

Net loss applicable to common stockholders

   $ (118,725   $ (21,123
  

 

 

   

 

 

 

NET LOSS PER SHARE OF COMMON STOCK -

    

BASIC

   $ (0.12   $ (0.02
  

 

 

   

 

 

 

DILUTED

   $ (0.12   $ (0.02
  

 

 

   

 

 

 

WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING

     969,834        969,834   
  

 

 

   

 

 

 

The accompanying notes are an integral part of the

consolidated financial statements.

 

21


Table of Contents

CHASE GENERAL CORPORATION AN SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Years Ended June 30, 2011 and 2010

 

     Prior Cumulative      Cumulative                             
     Preferred Stock      Preferred Stock      Common      Paid-In      Accumulated        
     Series A      Series B      Series A      Series B      Stock      Capital      Deficit     Total  

BALANCE, JUNE 30, 2009

   $ 500,000       $ 500,000       $ 1,170,660       $ 190,780       $ 969,834       $ 3,134,722       $ (5,780,006   $ 685,990   

Net income

     -             -             -             -             -             -             106,949        106,949   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

BALANCE, JUNE 30, 2010

   $ 500,000       $ 500,000       $ 1,170,660       $ 190,780       $ 969,834       $ 3,134,722       $ (5,673,057   $ 792,939   

Net income

     -             -             -             -             -             -             9,347        9,347   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

BALANCE, JUNE 30, 2011

   $ 500,000       $ 500,000       $ 1,170,660       $ 190,780       $ 969,834       $ 3,134,722       $ (5,663,710   $ 802,286   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

The accompanying notes are an integral part of the consolidated financial statements.

 

22


Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended June 30, 2011 and 2010

 

    

2011

   

2010

 

CASH FLOWS FROM OPERATING ACTIVITIES

    

Collections from customers

   $     2,999,402      $     3,006,936   

Other income

     1,299        925   

Cost of sales, selling, general and administrative expenses paid

     (2,957,426     (2,799,647

Interest paid

     (10,435     (3,871

Income taxes paid

     (197     (385
  

 

 

   

 

 

 

Net cash provided by operating activities

     32,643        203,958   
  

 

 

   

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

    

Proceeds from sale of equipment

     500        -       

Purchases of property and equipment

     (33,488     (260,770
  

 

 

   

 

 

 

Net cash used in investing activities

     (32,988     (260,770
  

 

 

   

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

    

Proceeds from line-of-credit

     40,000        210,000   

Principal payments on line-of-credit

     (40,000     (210,000

Proceeds from equipment notes payable

     -            163,909   

Principal payments on notes payable

     (87,391     (29,360
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     (87,391     134,549   
  

 

 

   

 

 

 

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

     (87,736     77,737   

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

     106,508        28,771   
  

 

 

   

 

 

 

CASH AND CASH EQUIVALENTS, END OF PERIOD

   $ 18,772      $ 106,508   
  

 

 

   

 

 

 

RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES

    

Net income

   $ 9,347      $ 106,949   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation and amortization

     119,398        75,344   

Allowance for bad debts

     492        (845

Deferred income amortization

     (1,299     (1,299

Deferred income taxes

     5,294        70,665   

(Gain) on sale of equipment

     (500     1,839   

Effects of changes in operating assets and liabilities:

    

Trade receivables

     2,591        66,001   

Inventories

     (140,525     (36,426

Prepaid expenses

     (88     11,899   

Accounts payable

     36,062        (89,836

Accrued expenses

     1,873        (150

Income taxes payable

     (2     (183
  

 

 

   

 

 

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

   $ 32,643      $ 203,958   
  

 

 

   

 

 

 

The accompanying notes are an integral part of the

consolidated financial statements.

 

23


Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

Chase General Corporation (the Company) was incorporated on November 6, 1944 in the State of Missouri for the purpose of manufacturing confectionery products. The Company grants credit terms to substantially all customers, consisting of repackers, grocery accounts, and national syndicate accounts, who are primarily located in the Midwest region of the United States.

Significant accounting policies are as follows:

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Dye Candy Company. All intercompany transactions and balances have been eliminated in consolidation.

SEGMENT REPORTING OF THE BUSINESS

The subsidiary, Dye Candy Company, operates two divisions, Chase Candy Products and Seasonal Candy Products. Chase Candy Products involve production and sale of a candy bar marketed under the trade name “Cherry Mash”. The Seasonal Candy Products involve production and sale of coconut, peanut, chocolate, and fudge confectioneries. The products of both divisions are sold to the same type of customers in the same geographical areas. In addition, both divisions share a common labor force and utilize the same basic equipment and raw materials. Therefore, segment reporting for the two divisions is not maintained by Management and, accordingly, has not been disclosed in these consolidated financial statements.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

The Company considers all liquid investments with a maturity of three months or less when purchased to be cash equivalents.

REVENUE RECOGNITION

The Company recognizes revenues as product is shipped to customers. Net sales are comprised of the total sales billed during the period, including shipping and handling charges to customers, less the estimated returns, customer allowances and customer discounts.

 

24


Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

SHIPPING AND HANDLING COSTS

Shipping and handling costs for freight expense on goods shipped is included in cost of sales. Freight expense on goods shipped for the years ended June 30, 2011 and 2010 was $141,955 and $135,109, respectively.

RECEIVABLES

Accounts receivable are uncollateralized customer obligations which generally require payment within thirty days from the invoice date. Accounts receivable are stated at the invoice amount as no interest is charged to the customer for any past due amounts. Payments of accounts receivable are applied to the specific invoices identified on the customer’s remittance advice or, if unspecified, to the earliest unpaid invoices.

The carrying amount of accounts receivable is reduced by a valuation allowance that reflects management’s best estimate of amounts that will not be collected. The allowance for doubtful accounts is based on management’s assessment of the collectability of specific customer accounts and the aging of the accounts receivable. If there is a deterioration of a major customer’s credit worthiness or actual defaults are higher than the historical experience, management’s estimates of the recoverability of amounts due the Company could be adversely affected. All accounts or portions thereof deemed to be uncollectible, or to require an excessive collection cost, are written off to the allowance for doubtful accounts.

INVENTORIES

Inventories are carried at the “lower of cost or market value” with cost being determined on the “first-in, first-out” basis of accounting. Finished goods and goods in process include a provision for manufacturing overhead.

PROPERTY AND EQUIPMENT

Property and equipment is recorded at cost. The Company’s property and equipment are being depreciated on straight-line and accelerated methods over the following estimated useful lives:

 

Buildings

   39 years

Machinery and equipment

   5 - 7 years

Trucks and autos

   5 years

Office Equipment

   5 - 7 years

Leasehold improvements

  

Lesser of estimated

useful life or the

lease term

 

25


Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

IMPAIRMENT OF LONG-LIVED ASSETS

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceed the fair value of the assets.

INCOME TAXES

Deferred income taxes are provided using the liability method for temporary differences between financial statement and income tax reporting. Temporary differences are differences between the amounts of assets and liabilities reported for financial statement purposes and their tax bases. Deferred tax assets are recognized for temporary differences that will be deductible in future years’ tax returns and for operating loss and tax credit carryforwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some or all of the deferred tax assets will not be realized. Deferred tax liabilities are recognized for temporary differences that will be taxable in future years’ tax returns. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the dates of enactment.

The Company’s policy is to evaluate uncertain tax positions under the guidance as prescribed by ASC 740, Income Taxes. As of June 30, 2011, the Company has not identified any uncertain tax positions requiring recognition in the consolidated financial statements.

EARNINGS PER SHARE

Basic Earnings Per Common Share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted Earnings Per Common Share shall be computed by including contingently issuable shares with the weighted average shares outstanding during the period. When inclusion of the contingently issuable shares would have an antidilutive effect upon earnings per share, diluted earnings per share will be calculated in the same manner as basic earnings per share.

The following contingently issuable shares were not included in diluted earnings per common share as they would have an antidilutive effect upon earnings per share:

 

     2011      2010  

Shares issuable upon conversion of Series A

Prior Cumulative Preferred Stock

     400,000         400,000   

Shares issuable upon conversion of Series B

Prior Cumulative Preferred Stock

     375,000         375,000   

Shares issuable upon conversion of Series A

Cumulative Preferred Stock

     222,133         222,133   

Shares issuable upon conversion of Series B

Cumulative Preferred Stock

     36,201         36,201   

 

26


Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

ADVERTISING EXPENSE

Advertising is expensed when incurred. Advertising expense was $3,396 and $640 for the years ended June 30, 2011 and 2010, respectively.

IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS

During the third quarter 2010, Chase adopted FASB ASU No. 2010-06 Fair Value Measurements and Disclosures (Topic 820). This ASU requires new disclosures for transfers in and out of Levels 1 and 2, and Activity in Level 3 fair value measurements. The update also clarifies the level disaggregation and disclosures about inputs and valuation techniques. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009. The requirement related to Level 3 fair value measurements is effective for the Company for interim and annual reporting periods beginning after January 29, 2011. The adoption of the effective portions of this new standard did not have a material impact on the Company’s condensed consolidated financial statements and the Company does not expect a material impact on its condensed consolidated financial statements related to the Level 3 fair value disclosures.

In June 2009, the FASB issued new guidance on the consolidation of variable interest entities (“VIE”) in response to concerns about the application of certain key provision of pre-existing guidance, including those regarding the transparency of the involvement with a VIE. Specifically, this new guidance requires a qualitative approach to identifying a controlling financial interest in a VIE and requires ongoing assessment of whether an interest in a VIE makes the holder the primary beneficiary of the VIE and whether an entity is a VIE when a triggering event occurs. In addition, this new guidance requires additional disclosures about the involvement with a VIE and any significant changes in risk exposure due to that involvement. This new guidance is effective for fiscal years beginning after November 15, 2009. The Company adopted the new guidance in the first quarter of fiscal year 2011, which did not have a material impact on its condensed consolidated financial statements.

 

27


Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 2 - FORGIVABLE LOAN AND DEFERRED INCOME

During 2004, the Company received a $25,000 economic development incentive from Buchanan County, which is a five year forgivable loan at a rate of $5,000 per year. The Nodaway Valley Bank established an Irrevocable Standby Letter of Credit in the amount of $25,000 as collateral for this loan, with a maturity date of January 3, 2010. The Company met the criteria of occupying a 20,000 square foot building and creating a minimum of two new full-time equivalent jobs during the first year of operation in the new facility. In addition, the Company maintained 19 existing jobs during the five year term. Notice was received February 6, 2009 from the Buchanan County Commission, that the Company had fulfilled its minimum loan requirements so that the loan was forgiven in full and has no further obligations. Since the Company was no longer legally required to return the monies, the liability was reclassified as deferred revenue and amortized into income over the life of the lease term of the new facility. At June 30, 2009, a total of $25,000 was reclassified to deferred revenue. Deferred revenue is recognized on a straight line basis over the lease term of 20 years. During the years ended June 30, 2011 and 2010, deferred revenue of $1,299 was amortized into income for each period.

NOTE 3 - NOTES PAYABLE

The Company’s long-term debt consists of:

 

Payee

  

Terms

   2011      2010  

Ford Credit

   $1,001 monthly payments including interest of 0%; secured by a vehicle. Note was paid in full during the quarter ending December 31, 2010.    $ -         $ 9,003   

Ford Credit

   $573 monthly payments including interest of 6.99%; secured by a vehicle. Note was paid in full during quarter ending March 31, 2011.      -           13,636   

Ford Credit

   $679 monthly payments including interest of 0%; final payment due March 2016, secured by a vehicle.      38,713         -     

Ford Credit

   $517 monthly payment including interest of 0%; final payment due March 2016, secured by a vehicle.      29,450         -     

 

28


Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 3 - NOTES PAYABLE (CONTINUED)

 

Payee

  

Terms

   2011      2010  

Honda

   $508 monthly payments including interest of 1.9%; final payment due December 15, 2011, secured by a vehicle.      3,030         9,007   

Nissan

   $557 monthly payments including interest of 3.9%; final payment due April 2012, secured by a vehicle.      5,425         11,740   

Nodaway Valley Bank

   $3,192, including interest of 6.25%; final payment due June 2015, secured by equipment.      115,036         163,909   
     

 

 

    

 

 

 
   Total      191,654         207,295   
   Less current portion      54,844         56,820   
     

 

 

    

 

 

 
   Long-term portion    $   136,810       $   150,475   
     

 

 

    

 

 

 
Future minimum payments are:      
  

2012

   $ 54,844      
  

2013

     48,449      
  

2014

     50,643      
  

2015

     26,956      
  

2016

     10,762      
     

 

 

    
  

Total

   $ 191,654      
     

 

 

    

NOTE 4 - NOTE PAYABLE - BANK

Effective January 1, 2010, the Company had a $250,000 line-of-credit agreement which expired on January 3, 2011. This line-of-credit agreement was renewed to extend until January 3, 2012, with a variable interest rate at prime (5.0% at June 30, 2011 and 2010, respectively). The line-of-credit was collateralized by all the Company’s assets. At June 30, 2011 and 2010, there were no outstanding balances on the line-of-credit.

 

29


Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 5 - CAPITAL STOCK

Capital stock authorized, issued, and outstanding as of June 30, 2011 is as follows:

 

     Shares  
     Authorized      Issued and
Outstanding
 

Prior Cumulative Preferred Stock, $5 par value:

     

6% Convertible

     240,000      

Series A

        100,000   

Series B

        100,000   

Cumulative Preferred Stock, $20 par value:

     

5% Convertible

     150,000      

Series A

        58,533   

Series B

        9,539   
     Shares  
     Authorized      Issued and
Outstanding
 

Common Stock, $1 par value:

     

Reserved for conversion of

     

Preferred Stock - 1,030,166 shares

     2,000,000         969,834   

Cumulative Preferred Stock dividends in arrears at June 30, 2011 and 2010 totaled $7,308,446 and $7,180,374, respectively. Total dividends in arrears, on a per share basis, consist of the following at June 30, 2011 and 2010:

 

     2011      2010  

6% Convertible

     

Series A

   $   15.75       $   15.45   

Series B

     15.30         15.00   

5% Convertible

     

Series A

     61.75         60.75   

Series B

     61.75         60.75   

The 6% convertible prior cumulative preferred stock may, upon thirty days prior notice, be redeemed by the Corporation at $5.25 a share plus unpaid accrued dividends to date of redemption. In the event of voluntary liquidation, holders of this stock are entitled to receive $5.25 per share plus accrued dividends. Cumulative preferred stock may be exchanged for common stock at the option of the shareholders in the ratio of 4 common shares for one share of Series A and 3.75 common shares for one share of Series B.

 

30


Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 5 - CAPITAL STOCK (CONTINUED)

 

The Company has the privilege of redemption of 5% convertible cumulative preferred stock at $21.00 a share plus unpaid accrued dividends. In the event of voluntary or involuntary liquidation, holders of this stock are entitled to receive $20.00 a share plus unpaid accrued dividends. It may be exchanged for common stock at the option of the shareholders, in the ratio of 3.795 common shares for one of preferred.

NOTE 6 - INCOME TAX

The recognition of income tax expense related to uncertain tax provisions is determined under the provisions of FASB ASC-740-10. The Company had no unrecognized tax benefits as of the date of adoption. The income tax positions taken for open years are appropriately stated and supported for all open years. The Company’s federal tax returns for the fiscal years ended 2009, 2010, and 2011 are subject to examination by the IRS taxing authority.

As of June 30, 2009, the Company had a net operating loss carryforward of approximately $4,512 of which the Company’s June 30, 2010 profits were fully absorbed.

The sources of deferred tax assets and liability at June 30, 2011 and 2010 are as follows:

 

     2011     2010  

Deferred tax assets:

    

Inventories

   $     472      $     174   

Trade receivables

     5,230        5,063   

Contribution carryover

     1,198        607   

Deferred income

     6,071        6,513   
  

 

 

   

 

 

 

Total deferred tax assets

     12,971        12,357   

Deferred tax liability:

    

Property and equipment

     (106,290     (100,382
  

 

 

   

 

 

 

NET DEFERRED TAX LIABILITY

   $ (93,319   $ (88,025
  

 

 

   

 

 

 

The net deferred tax assets (liability) are presented in the accompanying June 30, 2011 and 2010 balance sheets as follows:

 

     2011     2010  

Current deferred tax asset

   $         6,900      $         5,844   

Noncurrent deferred tax liability

     (100,219     (93,869
  

 

 

   

 

 

 

NET DEFERRED TAX LIABILITY

   $ (93,319   $ (88,025
  

 

 

   

 

 

 

 

 

31


Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 6 - INCOME TAX (CONTINUED)

 

The provision for income taxes, for the years ended June 30, 2011 and 2010, consists of the following:

 

     2011      2010  

Current tax expense

   $ 107       $ 202   

Deferred tax expense

     5,294         70,665   
  

 

 

    

 

 

 
   $     5,401       $     70,867   
  

 

 

    

 

 

 

The income tax provision differs from the amount of income tax determined by applying the statutory federal income tax rate to pretax income for the years ended June 30, 2011 and 2010 due to the following:

 

     2011     2010  

Computed “expected” tax

   $ 5,162      $ 62,236   

Increase (decrease) in income taxes (benefits) resulting from:

    

State income taxes, net of federal benefit

     603        5,960   

Other

     (364     2,671   
  

 

 

   

 

 

 
   $     5,401      $     70,867   
  

 

 

   

 

 

 

The Company has unused contributions of $3,520 to carryforward that will expire for tax years ranging from 2015 through 2016.

NOTE 7 - INCOME (LOSS) PER SHARE

The loss per share was computed on the weighted average of outstanding common shares during the year as follows:

 

     2011     2010  

Net income

   $         9,347      $     106,949   

Preferred dividend requirements:

    

6% Prior Cumulative Preferred, $5 par value

     60,000        60,000   

5% Convertible Cumulative Preferred, $20 par value

     68,072        68,072   
  

 

 

   

 

 

 

Total dividend requirements

     128,072        128,072   
  

 

 

   

 

 

 

Net loss - common stockholders

   $ (118,725   $ (21,123
  

 

 

   

 

 

 

 

32


Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 7 - INCOME (LOSS) PER SHARE (CONTINUED)

 

     2011     2010  

Weighted average of shares - Basic

     969,834        969,834   
  

 

 

   

 

 

 

Dilutive effect of contingently issuable shares

     1,033,334        1,033,334   
  

 

 

   

 

 

 

Weighted Average Shares – Diluted

     2,003,168        2,003,168   
  

 

 

   

 

 

 

Basic earnings (loss) per share

   $ (0.12   $ (0.02
  

 

 

   

 

 

 

Diluted earnings per share

   $ (0.12   $ (0.02
  

 

 

   

 

 

 

NOTE 8 - SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

 

     2011      2010  

Cash paid for:

     

Interest

   $     10,435       $     3,871   

Income taxes

     197         385   

Non-cash transaction:

     

Financing of new vehicles

     71,750         -     

Value of vehicles traded-in

     26,063         -     

NOTE 9 - COMMITMENTS

Dye Candy Company leases its office and manufacturing facility, located at 1307 South 59th, St. Joseph, Missouri, from an entity owned by the Vice-President and Director of the Company and his spouse. The period of the lease is from February 1, 2005 through March 31, 2025, with an option to extend for an additional term of five years, and currently requires payments of $6,500 per month. At the end of the first five years, the base rent shall be increased an amount not greater than 30%, at the sole discretion of lessor and for each additional term of five years. Rental expense was $78,000 for each year ended June 30, 2011 and 2010. The amounts are included in cost of sales.

 

33


Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 9 - COMMITMENTS (CONTINUED)

 

Future minimum lease payments under this lease are as follows:

Year ending June 30:

 

2012

   $ 78,000   

2013

     78,000   

2014

     78,000   

2015

     78,000   

2016

     78,000   

Thereafter

     682,500   
  

 

 

 
   $ 1,072,500   
  

 

 

 

As of June 30, 2011, the Company had raw materials purchase commitments with three vendors totaling $410,000.

NOTE 10 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s financial instruments consist principally of cash and cash equivalents, trade receivables and payables, and notes payable. There are no significant differences between the carrying value and fair value of any of these consolidated financial instruments. As of June 30, 2011, the amount of the Company’s long-term debt approximates fair value based on the present value of estimated future cash flows using a discount rate commensurate with a borrowing rate available to the Company.

NOTE 11 - CONCENTRATION OF CREDIT RISK

For the years ending June 30, 2011 and 2010, two customers accounted for 43% and 39%, respectively, of the gross sales. For the year ending June 30, 2011 and 2010, two customers accounted for 53% and four customers accounted for 77%, respectively, of accounts receivable.

NOTE 12 - RECLASSIFICATIONS

Certain reclassifications of prior year’s amounts have been made to conform to the presentation adopted for 2011. These reclassifications had no effect on previously reported earnings or net equity.

 

34


Table of Contents
Item 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
  ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable

Item 9A(T) CONTROLS AND PROCEDURES

 

  (a) Evaluation of Disclosure Controls and Procedures

The Company’s principal executive officer, who is also the chief financial and accounting officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this report. Based on such evaluation, such officer has concluded that the Company’s disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed in periodic filings under the Exchange Act is accumulated and communicated to Management, including those officers, and to members of the Board of Directors, to allow timely decisions regarding required disclosure.

 

  (b) Management’s Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Management has assessed the Company’s internal control over financial reporting in relation to criteria described in Internal Control-Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this assessment using those criteria, management concluded that, as of June 30, 2011, the Company’s internal control over financial reporting was effective.

This Annual Report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to the temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Annual Report.

 

  (c) Changes in Internal Controls

There were no significant changes in the Company’s internal controls over financial reporting or in other factors that in management’s estimates are reasonably likely to materially affect the Company’s internal controls over financial reporting subsequent to the date of the evaluation.

 

Item 9B OTHER INFORMATION

None

 

35


Table of Contents

PART III

 

Item 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

  (a) Directors

 

Name

   Age     

Periods of Service as Director

  

Terms

Barry M. Yantis

     66       1980 to present    One year

Brett A. Yantis

     43       January 21, 1999 to present    One year

Brian A. Yantis

     63       July 16, 1986 to present    One year

Executive Officers

 

Name

   Age     

Position

   Years of
Service as
an  Officer
  

Term

Barry M. Yantis

     66       President, CEO and Treasurer    32    Until successor elected

Brett A. Yantis

     43       Vice-President    9    Until successor elected

Brian A. Yantis

     63       Secretary    19    Until successor elected

 

  (b) Certain Significant Employees

There are no significant employees other than above.

 

  (c) Family Relationships

Barry M. Yantis and Brian A. Yantis are brothers. Brett A. Yantis is the son of Barry M. Yantis.

Business Experience

 

  (1) Barry M. Yantis, president and treasurer has been an officer of the Company for thirty-two years, twelve years as vice-president and twenty years as president. He has been on the board of directors for thirty-two years and has been associated with the candy business for thirty-seven years.

Brett A. Yantis was elected to the position of director during the year ending June 30, 1999. Brett was elected vice-president in January 2003. Brett has been associated with the Company for eighteen years.

Brian A. Yantis, secretary has been an officer of the Company since May 1992. Until retiring in 2011, he had been associated with the insurance business for thirty-six years and was a vice-president of Aon Risk Services in Chicago, Illinois for twenty-two years.

 

  (2) The directors and executive officers listed above are also the directors and executive officers of Dye Candy Company.

 

36


Table of Contents
  (d) Involvement in Certain Legal Proceedings

Not applicable

 

  (e) Audit Committee Financial Expert

Registrant is not required to have an audit committee since the stock is not actively traded. The Board of Directors are not considered audit committee financial experts, but do effectively operate as the audit committee.

 

  (f) Code of Ethics

The Company has adopted a Code of Business Conduct and Ethics that applies to all executive officers, directors and employees of the Company. The Code of Business Conduct and Ethics is attached as Exhibit 14 to this Annual Report on Form 10-K.

 

Item 11 EXECUTIVE COMPENSATION

 

  (a) General

Executive officers are compensated for their services as set forth in the Summary Compensation Table. These salaries are approved yearly by the Board of Directors.

 

  (b)         

 

Summary Compensation Table
                                Long Term Compensation     
           Annual Compensation      Awards    Payouts     

Name and

Principal Position

  

Fiscal
Year End

   Salary      Bonus      Other
Annual
Compensation
     Restricted
Stock
Award (s)
   Option/
SARs (#)
   LTIP
Payouts
   All other
Compensation

Barry M. Yantis

   1) 06-30-11    $   132,000       $   1,000       $ 2,340       -    -    -    -

Barry M. Yantis

   1) 06-30-10    $ 132,000       $ -         $ 3,700       -    -    -    -

Barry M. Yantis

   1) 06-30-09    $ 127,902       $ -         $ 2,635       -    -    -    -

 

  1) CEO, President and Treasurer

 

  2) No other compensation than that which is listed in compensation table.

 

  3) No other officers have compensation over $100,000 for their services besides those listed in this compensation table.

 

  (c) Option/SAR grants table

Not applicable

 

  (d) Aggregated option/SAR exercises and fiscal year-end option/SAR value table

Not applicable

 

  (e) Long-term incentive plan awards table

Not applicable

 

37


Table of Contents
Item 11 EXECUTIVE COMPENSATION (CONTINUED)

 

 

  (f) Compensation of Directors

Directors are not compensated for services on the board. The directors are reimbursed for travel expenses incurred in attending board meetings. During the fiscal year 2011 and 2010, $273 and $-0-, respectively, of travel expenses were reimbursed to board member Brian A. Yantis.

 

  (g) Employment contracts and termination of employment and change in control arrangements

No employment contracts exist with any executive officers. In addition, there are no contracts currently in place regarding termination of employment or change in control arrangements.

 

  (h) Report on repricing of option/SARs

Not applicable

 

  (i) Additional information with respect to compensation committee interlocks and insider participation in compensation decisions

The registrant has no formal compensation committee. The Board of Directors, Brian A. Yantis, Barry M. Yantis, and Brett A. Yantis (all current officers of the Company) annually approve the compensation of Barry M. Yantis, CEO, President and Treasurer.

 

  (j) Board compensation committee report on executive compensation

The Board bases the annual salary of the CEO on the Company’s prior year performance. The criteria is based upon, but is not limited to, market area expansion, gross profit improvement, control of operating expenses, generation of positive cash flow, and hours devoted to the business during the previous fiscal year.

 

38


Table of Contents
Item 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

   

Title of Class

  

Name and Address

   Amounts
and
Nature

of
Beneficial
Ownership
    % of Class
(a)  

Security ownership of certain beneficial owners

       
  Common; par value $1 per share   

Barry Yantis, CEO &

Director

     194,385   (1)    16.9%  (2)
     5605 Osage Drive     
     St. Joseph, Mo.     
     64503     
    

Brian Yantis, Officer &

Director

     97,192   (1)    8.4%  (2)
     1210 E. Clarendon     
     Arlington Heights, IL.     
     60004     
(b)   Security ownership of management        
  Common; par value $1 per share    Two directors and CEO as a group      110,856      11.4%
  Prior Cumulative Preferred, $5 par value: Series A, 6% convertible    Two directors and CEO as a group      21,533      21.5%
 

Prior Cumulative Preferred $5 par value: Series B, 6% convertible

   Two directors and CEO as a group      21,533      21.5%
  Cumulative Preferred, $20 par value: Series A, $5 convertible    Two directors and CEO as a group      3,017      5.2%
  Cumulative Preferred, $20 par value: Series B, $5 convertible    Two directors and CEO as a group      630      6.6%

 

  (1) Includes 120,477 and 60,244 shares, respectively, which could be received within 30 days upon conversion of preferred stock.

 

  (2) Reflects the percentage assuming the preferred shares above were converted into common stock.

        (c)     No known change of control is anticipated.

 

39


Table of Contents
Item 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 

  (a) Transactions with management and others

The registrant’s subsidiary, Dye Candy Company entered into an operating lease agreement during the 2005 fiscal year to provide office and manufacturing facilities with a limited liability company that is owned 100% by Vice-President and Director, Brett A. Yantis and his spouse. The annual rent is $78,000.

 

  (b) Certain business relationships

Not applicable

 

  (c) Indebtedness of management

Not applicable

 

  (d) Transactions with promoters

Not applicable

 

Item 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table shows the aggregate fees billed to the Company for professional services for the years ended June 30, 2010 and 2009:

 

     2010      2009  

Audit fees:

     

Mayer Hoffman McCann P.C.

   $   52,587       $   56,745   

Tax fees

     -           -     

All other fees

     -           -     

 

40


Table of Contents

PART IV

 

Item 15 EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following documents are filed as part of this report.

 

1.   Financial Statements:    Page  
 

Index to Financial Statements

     17   
 

Consolidated Balance Sheets

     19 - 20   
 

Consolidated Statements of Operations

     21   
 

Consolidated Statements of Stockholders’ Equity

     22   
 

Consolidated Statements of Cash Flows

     23   
  Notes to Consolidated Financial Statements      24 - 34   

 

  2. Financial Statements Schedules:

None

 

  3. Exhibits:

The exhibits listed below are filed with or incorporated by reference in this report.

The following have been previously filed and are incorporated by reference to prior years’ Forms 10-K filed by the Registrant:

3.1 Articles of Incorporation of Chase General Corporation

3.2 Bylaws

The following are Exhibits attached or explanations included in “Notes to Financial Statements” in Part II of this report:

 

  4. Instruments defining the rights of security holders including indentures - Refer to Note 5.
  11. Computation of per share earnings - Refer to Note 7.
  14. Code of Ethics
  21. Subsidiaries of registrant - Refer to Note 1 of Notes to Financial Statements.
  31.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a)/15d – 14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  32.1 Certification of Chairman of the Board, Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

41


Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

 

   

CHASE GENERAL CORPORATION

(Registrant)

 

Date: September 22, 2011

 

 

By:

 

 

/s/    Barry M. Yantis        

    Barry M. Yantis
    Chairman of the Board, Chief Executive Officer,
    President and Treasurer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated below.

 

Signatures

  

Title

 

Date

/s/    Barry M. Yantis        

Barry M. Yantis

  

Chairman of the Board, Chief Executive

Officer and Chief Financial Officer,

President, Treasurer and Director

  September 22, 2011

/s/    Brett Yantis        

Brett Yantis

  

Vice-President and Director

  September 22, 2011

/s/    Brian A. Yantis        

Brian A. Yantis

  

Secretary and Director

  September 22, 2011

 

42