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Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the 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

 

(IRS Employer Identification No.)

incorporation or organization)

 

 

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:

Title of each class

Ticker symbol(s)

Name of each exchange on which registered

None

Not Applicable

Not Applicable

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 No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes No

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

Large accelerated filer

Accelerated filer

 

Nonaccelerated filer

Smaller reporting company

 

Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes No

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

As of May 9, 2025, there were 969,834 shares of common stock, $1.00 par value, outstanding.

Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

FOR THE NINE MONTHS ENDED March 31, 2025

PART I

FINANCIAL INFORMATION

ITEM 1.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS AS OF March 31, 2025 AND JUNE 30, 2024 (UNAUDITED)

1

CONDENSED CONSOLIDATED STATEMENTS OF oPERATIONS FOR THE THREE MONTHS ENDED March 31, 2025 AND 2024 (UNAUDITED)

3

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED March 31, 2025 AND 2024 (UNAUDITED)

4

CONDENSED CONSOLIDATED STATEMENTS OF stockholders’ Equity FOR THE Three and NINE MONTHS ENDED March 31, 2025 AND 2024 (UNAUDITED)

5

CONDENSED CONSOLIDATED STATEMENTS OF Cash flows FOR THE NINE MONTHS ENDED March 31, 2025 AND 2024 (UNAUDITED)

6

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

7

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

13

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

18

ITEM 4.

CONTROLS AND PROCEDURES

18

PART II

OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

19

ITEM 1A.

RISK FACTORS

19

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

19

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

19

ITEM 4.

MINE SAFETY DISCLOSURES

19

ITEM 5.

OTHER INFORMATION

19

ITEM 6.

EXHIBITS

19

SIGNATURES

20

Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

    

March 31,

June 30, 

2025

    

2024

ASSETS

  

  

  

  

CURRENT ASSETS

  

  

Cash and Cash Equivalents

$

131,429

$

41,974

Trade Receivables, Net of Allowance for Credit Losses of $1,896

 

125,344

 

222,699

Inventories:

 

  

 

  

Finished Goods

 

199,931

 

384,641

Goods in Process

 

14,151

 

21,971

Raw Materials

 

93,277

 

119,508

Packaging Materials

 

140,105

 

193,122

Prepaid Expenses

 

12,456

 

6,640

Total Current Assets

 

716,693

 

990,555

 

  

 

  

LONG-TERM ASSETS

 

  

 

  

Property and Equipment:

Land

 

35,000

 

35,000

Buildings

 

77,348

 

77,348

Machinery and Equipment

 

944,476

 

866,976

Trucks and Autos

 

184,200

 

184,200

Office Equipment

 

33,025

 

33,025

Leasehold Improvements

 

72,068

 

72,068

Total

 

1,346,117

 

1,268,617

Less: Accumulated Depreciation and Amortization

 

(1,096,790)

 

(1,061,745)

Total Property and Equipment, Net

 

249,327

 

206,872

Right-of-Use Asset

429,299

365,372

Deferred Tax Asset

18,814

21,239

Total Long-Term Assets

697,440

593,483

Total Assets

$

1,414,133

$

1,584,038

The accompanying notes are an integral part of the unaudited

condensed consolidated financial statements.

(1)

Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(UNAUDITED)

March 31,

June 30, 

    

2025

    

2024

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts Payable

$

75,805

$

173,153

Current Maturities of Notes Payable

 

22,471

 

161,688

Current Maturities of Lease Liability

73,279

52,019

Accrued Expenses

 

37,397

 

25,099

Refund Liability Owed to Customers

11,000

16,533

Deferred Income

 

 

972

Total Current Liabilities

 

219,952

 

429,464

LONG-TERM LIABILITIES

Notes Payable, Less Current Maturities

 

19,919

 

36,870

Lease Liability, Less Current Maturities

356,020

313,353

Total Long-Term Liabilities

 

375,939

 

350,223

Total Liabilities

 

595,891

 

779,687

COMMITMENTS AND CONTINGENCIES (NOTE 7)

STOCKHOLDERS’ EQUITY

Capital Stock Issued and Outstanding:

Prior Cumulative Preferred Stock, $5 Par Value:

Series A (Liquidation Preference $2,512,500 and $2,490,000, Respectively)

 

500,000

 

500,000

Series B (Liquidation Preference $2,467,500 and $2,445,000, Respectively)

 

500,000

 

500,000

Cumulative Preferred Stock, $20 Par Value:

Series A (Liquidation Preference $5,589,894 and $5,545,994, Respectively)

 

1,170,660

 

1,170,660

Series B (Liquidation Preference $910,982 and $903,828, 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

 

(5,647,754)

 

(5,661,645)

Total Stockholders’ Equity

 

818,242

 

804,351

Total Liabilities and Stockholders’ Equity

$

1,414,133

$

1,584,038

The accompanying notes are an integral part of the unaudited

condensed consolidated financial statements.

(2)

Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

Three Months Ended

March 31,

2025

    

2024

SALES

$

308,464

414,595

 

  

 

  

COST OF SALES

 

232,359

 

343,657

Gross Profit on Sales

 

76,105

 

70,938

 

  

 

  

OPERATING EXPENSES

 

  

 

  

Selling

 

63,629

 

67,319

General and Administrative

 

150,605

 

143,689

Total Operating Expenses

 

214,234

 

211,008

 

  

 

  

Loss from Operations

 

(138,129)

 

(140,070)

 

  

 

  

OTHER INCOME (EXPENSE)

 

  

 

  

Miscellaneous Income

 

649

 

702

Interest Expense

 

(571)

 

(265)

Total Other Income, net

 

78

 

437

 

  

 

  

LOSS BEFORE INCOME TAXES

 

(138,051)

 

(139,633)

 

  

 

  

INCOME TAX BENEFIT

 

33,340

 

33,736

 

  

 

  

NET LOSS

$

(104,711)

$

(105,897)

 

  

 

  

LOSS PER SHARE

 

  

 

  

Basic and diluted

$

(0.14)

$

(0.14)

The accompanying notes are an integral part of the unaudited

condensed consolidated financial statements.

(3)

Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

Nine Months Ended

March 31,

2025

    

2024

SALES

$

2,752,997

2,863,886

 

  

 

  

COST OF SALES

 

1,916,706

 

2,139,868

Gross Profit on Sales

 

836,291

 

724,018

 

  

 

  

OPERATING EXPENSES

 

  

 

  

Selling

 

273,153

 

274,414

General and Administrative

 

534,318

 

508,559

Total Operating Expenses

 

807,471

 

782,973

 

  

 

  

Income (Loss) from Operations

 

28,820

 

(58,955)

 

  

 

  

OTHER INCOME (EXPENSE)

 

  

 

  

Miscellaneous Income

 

1,465

 

1,505

Interest Expense

 

(11,949)

 

(14,049)

Total Other Expenses, net

 

(10,484)

 

(12,544)

 

  

 

  

INCOME (LOSS) BEFORE INCOME TAXES

 

18,336

 

(71,499)

 

  

 

  

INCOME TAX (PROVISION) BENEFIT

 

(4,445)

 

9,934

 

  

 

  

NET INCOME (LOSS)

$

13,891

$

(61,565)

 

  

 

  

LOSS PER SHARE

 

  

 

  

Basic and Diluted

$

(0.08)

$

(0.16)

The accompanying notes are an integral part of the unaudited

condensed consolidated financial statements.

(4)

Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

Prior Cumulative

Cumulative

  

  

  

  

Preferred Stock

Preferred Stock

Common

Paid-In

Accumulated

  

    

Series A

    

Series B

    

Series A

    

Series B

    

Stock

    

Capital

    

Deficit

    

Total

BALANCE, December 31, 2023

$

500,000

$

500,000

$

1,170,660

$

190,780

$

969,834

$

3,134,722

$

(5,525,236)

$

940,760

Net loss, three months ended March 31, 2024

 

 

 

 

 

 

 

(105,897)

 

(105,897)

BALANCE, March 31, 2024

$

500,000

$

500,000

$

1,170,660

$

190,780

$

969,834

$

3,134,722

$

(5,631,133)

$

834,863

Prior Cumulative

Cumulative

  

  

  

  

Preferred Stock

Preferred Stock

Common

Paid-In

Accumulated

  

    

Series A

    

Series B

    

Series A

    

Series B

    

Stock

    

Capital

    

Deficit

    

Total

BALANCE, December 31, 2024

$

500,000

$

500,000

$

1,170,660

$

190,780

$

969,834

$

3,134,722

$

(5,543,043)

$

922,953

Net loss, three months ended March 31, 2025

 

 

 

 

 

 

 

(104,711)

 

(104,711)

BALANCE, March 31, 2025

$

500,000

$

500,000

$

1,170,660

$

190,780

$

969,834

$

3,134,722

$

(5,647,754)

$

818,242

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, 2023

$

500,000

$

500,000

$

1,170,660

$

190,780

$

969,834

$

3,134,722

$

(5,569,568)

$

896,428

Net loss, nine months ended March 31, 2024

 

 

 

 

 

 

 

(61,565)

 

(61,565)

BALANCE, March 31, 2024

$

500,000

$

500,000

$

1,170,660

$

190,780

$

969,834

$

3,134,722

$

(5,631,133)

$

834,863

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, 2024

$

500,000

$

500,000

$

1,170,660

$

190,780

$

969,834

$

3,134,722

$

(5,661,645)

$

804,351

Net income, nine months ended March 31, 2025

 

 

 

 

 

 

 

13,891

 

13,891

BALANCE, March 31, 2025

$

500,000

$

500,000

$

1,170,660

$

190,780

$

969,834

$

3,134,722

$

(5,647,754)

$

818,242

The accompanying notes are an integral part of the unaudited

condensed consolidated financial statements.

(5)

Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Nine Months Ended

March 31,

    

2025

    

2024

    

CASH FLOWS FROM OPERATING ACTIVITIES

 

  

 

  

 

Net Income (Loss)

$

13,891

$

(61,565)

Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by/(Used in) Operating Activities:

 

  

 

Depreciation and Amortization

 

35,045

 

32,410

Deferred Income Amortization

 

(972)

 

(972)

Deferred Income Taxes

2,425

(11,526)

Noncash Operating Lease Expense

6,500

Effects of Changes in Operating Assets and Liabilities:

 

  

 

  

Trade Receivables

 

97,355

 

84,948

Inventories

 

271,778

 

292,583

Prepaid Expenses

 

(5,816)

 

2,696

Accounts Payable

 

(97,348)

 

(54,188)

Refund Liability Owed to Customers

(5,533)

3,000

Accrued Expenses

 

12,298

 

(1,708)

Net Cash Provided by Operating Activities

 

323,123

 

292,178

 

  

 

  

CASH FLOWS FROM INVESTING ACTIVITIES

 

  

 

  

Purchases of Property and Equipment

 

(77,500)

 

Net Cash Used in Investing Activities

 

(77,500)

 

 

  

 

  

CASH FLOWS FROM FINANCING ACTIVITIES

 

  

 

  

Proceeds from Line-of-Credit

 

330,000

 

290,000

Principal Payments on Line-of-Credit

 

(470,000)

 

(500,000)

Proceeds from Note Payable - Stockholder (Note 7)

100,000

Principal Payments on Note Payable - Stockholder (Note 7)

(100,000)

Principal Payments on Note Payable

 

(16,168)

 

(9,280)

Net Cash Used in Financing Activities

 

(156,168)

 

(219,280)

 

  

 

  

INCREASE IN CASH AND CASH EQUIVALENTS

 

89,455

 

72,898

 

  

 

  

Cash and Cash Equivalents - Beginning of Period

 

41,974

 

11,295

 

  

 

  

CASH AND CASH EQUIVALENTS - END OF PERIOD

$

131,429

$

84,193

The accompanying notes are an integral part of the unaudited

condensed consolidated financial statements.

(6)

Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

PART I.     FINANCIAL INFORMATION

Item 1. Condensed Consolidated financial statements

notes to condensed consolidated financial statements

(unaudited)

NOTE 1       SIGNIFICANT ACCOUNTING POLICIES

General

The condensed consolidated balance sheet of Chase General Corporation (hereinafter referred to as Chase, the Company, we, our, and us) at June 30, 2024, has been taken from audited consolidated financial statements at that date and condensed. The condensed consolidated financial statements as of and for the three and nine months ended March 31, 2025, and for the three and nine months ended March 31, 2024, are unaudited and reflect all normal and recurring accruals and adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position, operating results and cash flows for the interim periods presented in this quarterly report. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, together with management’s discussion and analysis of financial condition and results of operations, contained in our Annual Report on Form 10-K for the year ended June 30, 2024. The results of operations for the three and nine months ended March 31, 2025, and cash flows for the nine months ended March 31, 2025, are not necessarily indicative of the results for the entire fiscal year ending June 30, 2025. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to fairly present financial position, results of operations, and cash flows for the periods have been included.

Revenue Recognition

The majority of our revenue is derived by fulfilling customer orders for the purchase of our products, including 1) a candy bar marketed under the trade name “Cherry Mash” and 2) coconut, peanut, chocolate, and fudge confectioneries. The Company recognizes revenue at the point in time that control of the ordered product(s) is transferred to the customer, which is typically upon shipment to the customer. Shipping and handling costs incurred to ship product to the customer are recorded within cost of sales. Amounts billed and due from our customers are classified as trade receivables on the consolidated balance sheet and require payment on a short-term basis. Generally, individual orders from customers are accounted for as a single performance obligation.

Revenue is measured as the amount of consideration we expect to receive in exchange for fulfilling product orders. Sales, value added, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. The amount of consideration the Company expects to receive and revenue the Company recognizes includes estimates of variable consideration, including costs for trade promotional programs, customer incentives, and allowances and discounts associated with aged or potentially unsaleable products. These estimates are based upon our analysis of the programs offered, historical trends, and expectations regarding customer and consumer participation, sales and payment trends and our experience with payment patterns associated with similar programs offered in the past. The Company reviews and updates these estimates regularly and the impact of any adjustments are recognized in the period the adjustments are identified.

(7)

Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

PART I.     FINANCIAL INFORMATION

Item 1. Condensed Consolidated financial statements

notes to condensed consolidated financial statements

(unaudited)

NOTE 1       SIGNIFICANT ACCOUNTING POLICIES (cont.)

Revenue Recognition (cont.)

The majority of the Company’s products are confectionery and confectionery-based and, therefore, exhibit similar economic characteristics, such that they are based on similar ingredients and are marketed and sold through the same channels to the same customers. The 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. Both divisions share a common labor force and utilize the same basic equipment and raw materials. Management considers these two divisions as one reportable segment. The various divisions of revenue are as follows:

For the three months ended March 31,

    

2025

    

2024

Sales - Chase Candy

 

$

306,936

 

$

406,561

Sales - Seasonal Candy

 

1,528

 

8,034

Sales

 

$

308,464

 

$

414,595

For the nine months ended March 31,

    

2025

    

2024

Sales - Chase Candy

 

$

1,351,246

 

$

1,359,896

Sales - Seasonal Candy

 

1,401,751

 

1,503,990

Sales

 

$

2,752,997

 

$

2,863,886

Subsequent Events

No events have occurred subsequent to March 31, 2025, through the date of filing this form, that would require disclosure in this Form 10-Q or would be required to be recognized in the condensed consolidated financial statements as of or for the nine month period ended March 31, 2025.

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Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

PART I.     FINANCIAL INFORMATION

Item 1. Condensed Consolidated financial statements

notes to condensed consolidated financial statements

(unaudited)

NOTE 2       LOSS PER SHARE

The loss per share was computed on the weighted average of outstanding common shares during the period. Diluted loss per share are calculated by including contingently issuable shares with the weighted average shares outstanding.

Three Months Ended

Nine Months Ended

March 31,

March 31,

    

2025

    

2024

    

2025

    

2024

    

Net (Loss) Income

$

(104,711)

$

(105,897)

$

13,891

$

(61,565)

Preferred Dividend Requirements:

 

  

 

  

 

  

 

  

6% Prior Cumulative Preferred, $5 Par Value

 

15,000

 

15,000

 

45,000

 

45,000

5% Convertible Cumulative Preferred, $20 Par Value

 

17,018

 

17,018

 

51,054

 

51,054

Total Dividend Requirements

 

32,018

 

32,018

 

96,054

 

96,054

Net Loss - Common Stockholders

$

(136,729)

$

(137,915)

$

(82,163)

$

(157,619)

Weighted Average Shares - Basic

969,834

969,834

969,834

969,834

Dilutive Effect of Contingently Issuable Shares

1,033,334

1,033,334

1,033,334

1,033,334

Weighted Average Shares - Diluted

2,003,168

2,003,168

2,003,168

2,003,168

Basic and Diluted Loss per Share

$

(0.14)

$

(0.14)

$

(0.08)

$

(0.16)

The Company excludes equity instruments from the calculation of diluted earnings per share if the effect of including such instruments is anti-dilutive.  All of the preferred stock, which is convertible into 1,033,334 shares of common stock, was excluded for the three and nine months ended March 31, 2025 and 2024, respectively, as its conversion would have an anti-dilutive effect.  Cumulative Preferred Stock dividends in arrears at March 31, 2025 and 2024 totaled $9,069,436 and $8,941,364, respectively. Total dividends in arrears, on a per share basis, consist of the following:

Nine Months Ended

March 31,

    

2025

    

2024

    

6% Convertible:

Series A

$

20

$

20

Series B

$

19

$

19

5% Convertible:

Series A

$

76

$

75

Series B

$

76

$

75

(9)

Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

PART I.     FINANCIAL INFORMATION

Item 1. Condensed Consolidated financial statements

notes to condensed consolidated financial statements

(unaudited)

NOTE 2       LOSS PER SHARE (cont.)

The 6% convertible prior cumulative preferred stock may, upon thirty days prior notice, be redeemed by the Corporation at $5.25 per 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. It may be exchanged for common stock at the option of the shareholders in the ratio of four common shares for one share of Series A and 3.75 common shares for one share of Series B.

The Company has the privilege of redemption of 5% convertible cumulative preferred stock at $21 per share plus unpaid accrued dividends. In the event of voluntary or involuntary liquidation, holders of this stock are entitled to receive $20 per 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 5% convertible preferred stock.

NOTE 3       NOTES PAYABLE AND LINE-OF-CREDIT

The Company’s debt consists of:

March 31,

June 30, 

Payee

    

Terms

    

2025

    

2024

Nodaway Valley Bank

$500,000 line-of-credit agreement expiring on January 2, 2026, with a variable interest rate at prime but not less than 5% (7.5% as of March 31, 2025). The line of credit is collateralized by substantially all assets of the Company.

$

$

140,000

Nodaway Valley Bank

$885 monthly payments, interest of 7.25%; final payment due April 2027, secured by a vehicle.

20,448

27,082

  

Ford Motor Credit Company, LLC

$1,126 monthly payments, interest of 2.9%; final payment due November 2026, secured by a vehicle.

21,942

31,476

  

 

  

 

  

Total

 

42,390

 

198,558

Less Current Portion

 

22,471

 

161,688

Long-Term Portion

$

19,919

$

36,870

Future minimum payments for the twelve months ending March 31 are:

March 31,

    

Amount

2026

$

22,471

2027

19,040

2028

879

Total

$

42,390

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Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

PART I.     FINANCIAL INFORMATION

Item 1. Condensed Consolidated financial statements

notes to condensed consolidated financial statements

(unaudited)

NOTE 4       INCOME TAXES

The Company follows the provisions for uncertain tax positions as addressed in Financial Accounting Standards Board Accounting Standards Codification 740-10. The Company recorded an income tax benefit of $33,340 for the three months ended March 31, 2025, which is a result of additional net operating losses generated during the period. The Company recorded an income tax provision of $4,445 for the nine months ended March 31, 2025, which is the result of additional net operating income generated during the period. The current income tax payable is $2,020 which results from the net operating loss being limited to 80% of taxable income. As of March 31, 2025, the Company has estimated net operating loss carryovers of $162,660, none of which expire.    

The Company recognized a net deferred tax asset of $18,814 for unrecognized tax benefits at March 31, 2025. The Company has no material tax positions at March 31, 2025, for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of such deductibility.  The Company had no accruals for interest or penalties at March 31, 2025. The Company’s federal income tax returns for the fiscal years ended 2022, 2023, and 2024 are subject to examination by the Internal Revenue Service taxing authority.

NOTE 5       SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Nine Months Ended

March 31,

    

2025

    

2024

    

Supplemental Cash Flow Information:

Interest paid

$

12,309

$

14,327

Right-of-use asset obtained in exchange for modification of operating lease liability

$

102,569

$

NOTE 6      DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s financial instruments consist principally of cash and cash equivalents, trade receivables and payables, and line-of-credit. There are no significant differences between the carrying value and fair value of any of these financial instruments.

NOTE 7       COMMITMENT, CONCENTRATIONS, CONTINGENCIES, AND RELATED PARTY TRANSACTIONS

The Company leases its office and manufacturing facility located in St. Joseph, Missouri under an operating lease from an entity that is partially owned by the son of the Chief Executive Officer of the Company. The original lease term was from February 1, 2005, through March 31, 2025, with an option to extend for an additional term of five years. The required lease payments through this period were $6,500 per month. During the year ended June 30, 2023, the Company determined the exercise of the renewal option to be reasonably assured and remeasured the right-of-use asset and lease liability to include the additional five years at what was the current rate, so that the new term expires on March 31, 2030. During the quarter ended March 31, 2025, the Company exercised the renewal option and remeasured the right-of-use asset and lease liability to reflect an increase in the required lease payments to $8,500 per month at the new current rate.

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Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

PART I.     FINANCIAL INFORMATION

Item 1. Condensed Consolidated financial statements

notes to condensed consolidated financial statements

(unaudited)

NOTE 7       COMMITMENT, CONCENTRATIONS, CONTINGENCIES, AND RELATED PARTY TRANSACTIONS (cont.)

An operating lease right-of-use asset and lease liability was recognized based on the present value of minimum lease payments over the remaining lease term. The Company’s operating lease has a remaining term of 5 years and the present value of the lease payments is calculated using the Company’s estimated incremental borrowing rate of 7.25% as of the remeasurement date. Operating lease expense is recognized on a straight-line basis over the lease term.

The Company’s lease agreement does not contain any residual value guarantees. The Company has made a policy election to combine lease and non-lease components, and a policy election to not recognize right-of-use assets or lease liabilities for leases that are less than twelve months. Cash paid for operating lease liabilities and operating lease expense was $58,500 for the nine months ended March 31, 2025, of which, $53,673 is included in cost of sales and $4,827 is included in general and administrative expenses.

Minimum annual payments required under existing operating lease liabilities that have initial or remaining noncancelable terms in excess of one year as of March 31, 2025, are as follows:

Twelve Months Ending March 31, 

    

Amount

2026

$

102,000

2027

102,000

2028

 

102,000

2029

102,000

2030

102,000

Total Lease Payments

510,000

Less: Imputed Interest

80,701

Total Lease Liabilities

$

429,299

On September 28, 2023, the Chief Executive Officer of the Company advanced the Company $100,000 under a standard promissory note agreement with interest at a rate of 8.5% per annum, due December 30, 2023. On November 30, 2023, the Company paid the note in full including interest of $1,446.

One of the Company’s major customers has discontinued the Mini Mash L212 segment, effective in August 2025. Based on historical sales to this customer, management expects a total loss of sales of approximately $200,000 or 15%.

As of March 31, 2025, the Company entered into a contract for the purchase of production equipment totaling $155,000. As a part of this agreement, a 50% downpayment of $77,500 was made, which has been recorded as machinery and equipment and has not yet been placed into service. The remaining $77,500 remains as a commitment of capital resources.

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Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

PART I Financial information

CHASE GENERAL CORPORATION AND SUBSIDIARY

PART I     financial INFORMATION

item 2. management’s discussion and analysis of

financial condition and results of operations

OVERVIEW

Chase General Corporation (Chase) is a holding company for its wholly-owned subsidiary, Dye Candy Company. This subsidiary is the main operating company that is engaged in the manufacture of confectionery products which are sold primarily to wholesale houses, grocery accounts, vendors, and repackers. The subsidiary (Company) operates two divisions, Chase Candy division and Seasonal Candy division, which 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.

The Company’s business, like that of many other confectionary product manufacturers, is seasonal. Historically, the Company has realized more of its sales and earnings in the second fiscal quarter, which includes the majority of the holiday shopping season, than in any other fiscal quarter.

RESULTS OF OPERATIONS - Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024, and Nine months Ended March 31, 2025 Compared to Nine months Ended March 31, 2024

The following management comments regarding Chase’s results of operations and outlook should be read in conjunction with the condensed consolidated financial statements included pursuant to Item 1 of the quarterly report.

The following table sets forth certain items as a percentage of sales for the periods presented:

    

Three Months Ended

 

    

Nine Months Ended

 

    

March 31,

 

March 31,

 

    

2025

    

2024

 

    

2025

    

2024

 

    

Sales

 

100

%  

100

%

 

100

%  

100

%

 

Cost of Sales

 

75

%  

83

%

 

70

%  

75

%

 

Gross Profit on Sales

 

25

%  

17

%

 

30

%  

25

%

 

Operating Expenses

 

69

%  

51

%

 

29

%  

27

%

 

Income (Loss) from Operations

 

(44)

%  

(34)

%

 

1

%  

(2)

%

 

Other Income (Expenses), Net

 

%  

%

 

%  

%

 

Net Income (Loss) before Income Taxes

 

(44)

%  

(34)

%

 

1

%  

(2)

%

 

Income Tax (Provision) Benefit

 

11

%  

8

%

 

%  

%

 

Net Income (Loss)

 

(33)

%  

(26)

%

 

1

%  

(2)

%

 

SALES

Sales decreased $106,131 or 26% for the three months ended March 31, 2025 to $308,464 compared to $414,595 for the three months ended March 31, 2024. Sales for Chase Candy decreased $99,625 to $306,936 for the three months ended March 31, 2025, compared to $406,561 for the three months ended March 31, 2024. Sales for Seasonal Candy decreased $6,506 to $1,528 for the three months ended March 31, 2025, compared to $8,034 for the three months ended March 31, 2024.

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Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

PART I.     FINANCIAL INFORMATION

Item 1. Condensed Consolidated financial statements

notes to condensed consolidated financial statements

(unaudited)

SALES (cont.)

The 25% decrease in sales of Chase Candy of $99,625 for the three months ended March 31, 2025, over the same period ended March 31, 2024, is primarily due to the effect of the following: 1) decreased sales to existing customers of approximately $40,700 for the Cherry Mash Bar L276/277 segment; 2) decreased sales to existing customers of the Cherry Mash Merchandisers L100/L200 segment by approximately $19,000; 3) decreased sales to existing customers of approximately $29,000 for the Mini Mash L278/L212 segment; 4) decreased sales to existing customers of the Changemaker Jar L260 and Mini Mash Keg L264 segments by approximately $3,200; 5) decreased sales to existing customers of the Bulk Mini Mash L279/L299 segment by approximately $1,200; and 6) increase in sales allowances and discounts by approximately $3,200.

The 81% decrease in sales of Seasonal Candy of $6,506 for the three months ended March 31, 2025 over the same period ended March 31, 2024, is primarily due to the effect of the following: 1) decreased sales in the bulk seasonal division by approximately $4,300 due to decline in sales from existing customers; and 2) decreased sales to existing customers in the clamshell division by approximately $2,600.

Sales decreased $110,889 or 4% for the nine months ended March 31, 2025 to $2,752,997 compared to $2,863,886 for the nine months ended March 31, 2024. Sales for Chase Candy decreased $8,650 to $1,351,246 for the nine months ended March 31, 2025, compared to $1,359,896 for the nine months ended March 31, 2024. Sales for Seasonal Candy decreased $102,239 to $1,401,751 for the nine months ended March 31, 2025, compared to $1,503,990 for the nine months ended March 31, 2024.

The 1% decrease in sales of Chase Candy of $8,650 for the nine months ended
March 31, 2025 over the same period ended March 31, 2024, is primarily due to the effect of the following: 1) decreased net sales of the Cherry Mash Bar L276/L277 segment by approximately $5,700 to existing customers; 2) decreased sales to existing customers for the Cherry Mash Merchandisers L100/L200 segment by approximately $22,400 versus the same period last year; offset by 3) a decrease in sales allowances and discounts by approximately $10,200, 4) increased sales of the Bulk Mini Mash L279/299 segment by approximately $1,700 due to increase in quantity sold to existing customers; and 5) increased sales to existing customers of the Mini Mash L212/L278 segment by approximately $9,000.

The 7% decrease in sales of Seasonal Candy of $102,239 for the nine months ended March 31, 2025 over the same period ended March 31, 2024, is primarily due to the effect of the following: 1) decreased sales in the bulk seasonal division by approximately $22,600 due to decline in sales to existing customers; 2) decreased sales to existing customers in the clamshell division by approximately $16,100; 3) decreased sales to existing customers in the regular produce category by approximately $73,700 versus the same period a year ago; offset by 4) increase in sales allowances and discounts by approximately $12,600.

In addition to the changes in overall quantities sold during both the three and nine months ended March 31, 2025, the Company was able to implement a price increase in March 2024 of approximately 14% for the majority of customers for Chase Candy products. For the Seasonal Candy divisions, the Company was able to implement a price increase in July 2024 of approximately 14% for the bulk and clamshell products. Both price increases noted above have contributed to an increase in margins for the three and nine months ended March 31, 2025.

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Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

PART I.     FINANCIAL INFORMATION

Item 1. Condensed Consolidated financial statements

notes to condensed consolidated financial statements

(unaudited)

COST OF SALES

The cost of sales decreased $111,298 to $232,359 or 75% of related sales for the three months ended March 31, 2025, compared to $343,657 or 83% of related sales for the three months ended March 31, 2024.

The cost of sales decreased $223,162 to $1,916,706 and decreased to 70% of related sales for the nine months ended March 31, 2025, compared to $2,139,868 or 75% of related sales for the nine months ended March 31, 2024.

The decrease in cost of sales as a percentage of sales for both the quarter and the nine months ended March 31, 2025, is related to price and labor efficiencies.  Due to volatility in the regions where raw materials are grown, management anticipates the prices of these raw materials to continue to fluctuate primarily based on supply and demand.

SELLING EXPENSES

Selling expenses for the three months ended March 31, 2025, decreased $3,690 to $63,629, but increased to 21% of sales, compared to $67,319, or 16% of sales for the three months ended March 31, 2024.

Selling expenses for the nine months ended March 31, 2025, decreased $1,261 to $273,153, which is 10% of sales, compared to $274,414, or 10% of sales for the nine months ended March 31, 2024.

The decrease in selling expenses for both the quarter and the nine months ended March 31, 2025, is primarily due to efforts to minimize selling expenses in an attempt to recover costs not passed along with price increases. For the nine months ended March 31, 2025, these decreases were offset by increases in freight costs attributable to ongoing supply chain issues, as well as an increase related to truck and automotive depreciation.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses for the three months ended March 31, 2025, increased $6,916 to $150,605 or 49% of sales, compared to $143,689 or 35% of sales for the three months ended March 31, 2024.

The increase of $6,916 in general and administrative expenses for the three months ended March 31, 2025, is primarily due to an increase in dues and subscriptions of approximately $6,800 compared to the three months ended March 31, 2024.

General and administrative expenses for the nine months ended March 31, 2025, increased $25,759 to $534,318 or 19% of sales, compared to $508,559 or 18% of sales for the nine months ended March 31, 2024.

The increase of $25,759 in general and administrative expenses for the nine months ended March 31, 2025, is primarily due to an increase in professional fees of approximately $12,500 compared to the nine months ended March 31, 2024. The increase in professional fees is related to the timing and nature of fees from service providers as a part of the annual and quarterly filings. Additionally, in the nine-month period ended March 31, 2025, dues and subscriptions increased by approximately $6,900, insurance expense increased by approximately $3,800, and office supplies expense increased by approximately $2,400 from the prior period.

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Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

PART I.     FINANCIAL INFORMATION

Item 1. Condensed Consolidated financial statements

notes to condensed consolidated financial statements

(unaudited)

OTHER INCOME (EXPENSE)

Other income (expense) decreased by $359 for the three months ended March 31, 2025, to $78, compared to $437 for the three months ended March 31, 2024.  

Other income (expense) decreased by $2,060 for the nine months ended March 31, 2025, to ($10,484), compared to ($12,544) for the nine months ended March 31, 2024.

The majority of this change can be attributed to a decrease in interest expense, due to interest rate reductions that began in the first quarter of 2024.

BENEFIT (PROVISION) FOR INCOME TAXES

Due to the net loss for the quarter ending March 31, 2025, the Company recorded an income tax benefit of approximately $33,000.  Due to the net income for the nine months ended March 31, 2025, the Company recorded an income tax provision of approximately ($4,000).  

NET INCOME (LOSS)

The Company reported a net loss for the three months ended March 31, 2025, of ($104,711), compared to a net loss of ($105,897) for the three months ended March 31, 2024. This increase of $1,186 is explained above.  The Company reported a net income for the nine months ended March 31, 2025, of $13,891, compared to a net loss of ($61,565) for the nine months ended March 31, 2024. This increase of $75,456 is explained above.

PREFERRED DIVIDENDS

Preferred dividends were $32,018 for the three months ended March 31, 2025 and March 31, 2024, which reflects additional preferred stock dividends in arrears on the Company’s Series A and Series B $5 par value preferred stock and its Series A and Series B $20 par value preferred stock.

Preferred dividends were $96,054 for the nine months ended March 31, 2025 and March 31, 2024, which reflects additional preferred stock dividends in arrears on the Company’s Series A and Series B $5 par value preferred stock and its Series A and Series B $20 par value preferred stock.

NET LOSS APPLICABLE TO COMMON STOCKHOLDERS

Net loss applicable to common stockholders for the three months ended March 31, 2025, was ($136,729) which is an increase of $1,186 as compared to the net loss applicable to common stockholders for the three months ended March 31, 2024, of ($137,915).

Net loss applicable to common stockholders for the nine months ended March 31, 2025 was ($82,163) which is an increase of $75,456 as compared to the net loss applicable to common stockholders for the nine months ended March 31, 2024 of ($157,619).

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Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

PART I.     FINANCIAL INFORMATION

Item 1. Condensed Consolidated financial statements

notes to condensed consolidated financial statements

(unaudited)

LIQUIDITY AND CAPITAL RESOURCES

The table below presents the summary of cash flows for the fiscal period indicated.

    

Nine Months Ended

    

March 31,

    

2025

    

2024

    

Net Cash Provided by Operating Activities

$

323,123

$

292,178

Net Cash Used in Investing Activities

$

(77,500)

$

Net Cash Used in Financing Activities

$

(156,168)

$

(219,280)

The $245,623 of cash provided by operating activities for the nine months ended March 31, 2025, is fully detailed in the condensed consolidated statement of cash flows. The $156,168 of cash used in financing activities for the nine months ended March 31, 2025 is fully detailed in the condensed consolidated statement of cash flows.

As of March 31, 2025, the Company entered into a contract for the purchase of production equipment totaling $155,000. As a part of this agreement, a 50% downpayment of $77,500 was made, which has been recorded as machinery and equipment and has not yet been placed into service. The remaining $77,500 remains as a commitment of capital resources.

One of the Company’s major customers has discontinued the Mini Mash L212 segment, effective in August 2025. Based on historical sales to this customer, management expects a total loss of sales of approximately $200,000 or 15%.

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. Due to volatility in the regions where these raw materials are grown, management anticipates the prices of these raw materials to continue to fluctuate primarily based on supply and demand. Management intends to make sales price adjustments in the future to correspond with changes in raw material prices. Management believes that the projected cash flow from operations combined with the availability on the line of credit and the Company’s ability to generate positive working capital will be sufficient to meet its funding requirements for the foreseeable future.

CRITICAL ACCOUNTING POLICIES

Forward-Looking Information

This report, as well as our other reports filed with the Securities and Exchange Commission (SEC), contains forward-looking statements made pursuant to the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. The words “believe,” “estimate,” “anticipate,” “project,” “intend,” “expect,” “plan,” “outlook,” “forecast,” “may,” “will,” “should,” “continue,” “predict,” and similar expressions are intended to identify forward-looking statements. This report contains forward-looking statements regarding, among other topics, our expected financial position, results of operations, cash flows, strategy, and management’s plans and objectives. Accordingly, these forward-looking statements are based on assumptions about a number of important factors. While we believe that our assumptions about such factors are reasonable, such factors involve risks, and uncertainties that could cause actual results to be different from what appear here. These risk factors include: the estimation process for the retail inventory method of accounting, the ability to adequately pass through customers unanticipated future increases in raw material costs, decreased demand for products, expected orders that do not occur, loss of key customers, the impact of competition and price erosion as well as supply and manufacturing constraints, and other risks and uncertainties. In light of these risks and uncertainties, there can be no assurance that the forward-looking information contained in this report will prove accurate, and our actual results may differ materially from these forward-looking statements. We assume no obligation to update any forward-looking statements made herein.

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Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

PART I.     FINANCIAL INFORMATION

Item 1. Condensed Consolidated financial statements

notes to condensed consolidated financial statements

(unaudited)

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable to a smaller reporting company.

ITEM 4.CONTROLS AND PROCEDURES

(a)Evaluation of Disclosure Controls and Procedures

Chase’s management, with the participation of the Chief Executive Officer, has evaluated the effectiveness of Chase’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 not effective as a result of a weakness in the design of internal control over financial reporting identified below.

Disclosure controls and procedures include controls and procedures designed 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.

A material weakness was identified in our internal control over financial reporting due to a lack of accounting personnel with the appropriate level of knowledge, experience and training to perform an assessment of its internal controls. This has also resulted in a failure to maintain appropriate segregation of duties over system access. Management believes that this material weakness did not have an adverse effect on the Company’s financial results reported herein.  

(b)Changes in Internal Control over Financial Reporting

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

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Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

PART Ii other information

ITEM 1.LEGAL PROCEEDINGS

None.

ITEM 1A.RISK FACTORS

Not applicable to a smaller reporting company.

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

None.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

a.None.

b.The total cumulative preferred stock dividends contingency at March 31, 2025 is $9,069,436.

ITEM 4.MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.OTHER INFORMATION

None.

ITEM 6.EXHIBITS

a.Exhibits.

Exhibit 31.1

Certification of Chief Executive Officer and Treasurer pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

Exhibit 32.1

Certification of President and Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 101

The following financial statements for the quarter ended March 31, 2025, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of March 31, 2025 and June 30, 2024, (ii) Condensed Consolidated Statements of Operations for the Three months Ended March 31, 2025 and 2024, (iii) Condensed Consolidated Statements of Operations for the Nine months Ended March 31, 2025 and 2024, (iv)  Consolidated Statements of Stockholders’ Equity for the Three and Nine months Ended March 31, 2025 and 2024, (v) Condensed Consolidated Statements of Cash Flows for the Nine months Ended March 31, 2025 and 2024, and (vi) the Notes to Condensed Consolidated Financial Statements, tagged as blocks of text.

Exhibit 104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

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Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

PART Ii other information

SIGNATURES

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.

   

Chase General Corporation and Subsidiary

(Registrant)

May 9, 2025

/s/ Barry M. Yantis

Date

Barry M. Yantis

Chairman of the Board, Chief Executive Officer and

Chief Financial Officer, President, and Treasurer

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