UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
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As of May 9, 2025, there were
CHASE GENERAL CORPORATION AND SUBSIDIARY
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
FOR THE NINE MONTHS ENDED March 31, 2025
CHASE GENERAL CORPORATION AND SUBSIDIARY
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
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| March 31, | June 30, | |||
2025 |
| 2024 | ||||
ASSETS |
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CURRENT ASSETS |
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Cash and Cash Equivalents | $ | | $ | | ||
Trade Receivables, Net of Allowance for Credit Losses of $ |
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Inventories: |
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Finished Goods |
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Goods in Process |
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Raw Materials |
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Packaging Materials |
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Prepaid Expenses |
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Total Current Assets |
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LONG-TERM ASSETS |
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Property and Equipment: | ||||||
Land |
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Buildings |
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Machinery and Equipment |
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Trucks and Autos |
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Office Equipment |
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Leasehold Improvements |
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Total |
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Less: Accumulated Depreciation and Amortization |
| ( |
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Total Property and Equipment, Net |
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Right-of-Use Asset | | | ||||
Deferred Tax Asset | | | ||||
Total Long-Term Assets | | | ||||
Total Assets | $ | | $ | | ||
The accompanying notes are an integral part of the unaudited
condensed consolidated financial statements.
(1)
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 | $ | | $ | | ||
Current Maturities of Notes Payable |
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Current Maturities of Lease Liability | | | ||||
Accrued Expenses |
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Refund Liability Owed to Customers | | | ||||
Deferred Income |
| — |
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Total Current Liabilities |
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LONG-TERM LIABILITIES | ||||||
Notes Payable, Less Current Maturities |
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Lease Liability, Less Current Maturities | | | ||||
Total Long-Term Liabilities |
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Total Liabilities |
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COMMITMENTS AND CONTINGENCIES (NOTE 7) | ||||||
STOCKHOLDERS’ EQUITY | ||||||
Capital Stock Issued and Outstanding: | ||||||
Prior Cumulative Preferred Stock, $ | ||||||
Series A (Liquidation Preference $ |
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Series B (Liquidation Preference $ |
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Cumulative Preferred Stock, $ | ||||||
Series A (Liquidation Preference $ |
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Series B (Liquidation Preference $ |
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Common Stock, $ |
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Paid-In Capital in Excess of Par |
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Accumulated Deficit |
| ( |
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Total Stockholders’ Equity |
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Total Liabilities and Stockholders’ Equity | $ | | $ | |
The accompanying notes are an integral part of the unaudited
condensed consolidated financial statements.
(2)
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 | $ | | | |||
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COST OF SALES |
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Gross Profit on Sales |
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OPERATING EXPENSES |
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Selling |
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General and Administrative |
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Total Operating Expenses |
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Loss from Operations |
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OTHER INCOME (EXPENSE) |
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Miscellaneous Income |
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Interest Expense |
| ( |
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Total Other Income, net |
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LOSS BEFORE INCOME TAXES |
| ( |
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INCOME TAX BENEFIT |
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NET LOSS | $ | ( | $ | ( | ||
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LOSS PER SHARE |
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Basic and diluted | $ | ( | $ | ( | ||
The accompanying notes are an integral part of the unaudited
condensed consolidated financial statements.
(3)
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 | $ | | | ||||
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COST OF SALES |
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Gross Profit on Sales |
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OPERATING EXPENSES |
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Selling |
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General and Administrative |
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Total Operating Expenses |
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Income (Loss) from Operations |
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OTHER INCOME (EXPENSE) |
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Miscellaneous Income |
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Interest Expense |
| ( |
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Total Other Expenses, net |
| ( |
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INCOME (LOSS) BEFORE INCOME TAXES |
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INCOME TAX (PROVISION) BENEFIT |
| ( |
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NET INCOME (LOSS) | $ | | $ | ( | |||
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LOSS PER SHARE |
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Basic and Diluted | $ | ( | $ | ( |
The accompanying notes are an integral part of the unaudited
condensed consolidated financial statements.
(4)
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 |
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Preferred Stock | Preferred Stock | Common | Paid-In | Accumulated |
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| Series A |
| Series B |
| Series A |
| Series B |
| Stock |
| Capital |
| Deficit |
| Total | |||||||||
BALANCE, December 31, 2023 | $ | | $ | | $ | | $ | | $ | | $ | | $ | ( | $ | | ||||||||
Net loss, three months ended March 31, 2024 |
| — |
| — |
| — |
| — |
| — |
| — |
| ( |
| ( | ||||||||
BALANCE, March 31, 2024 | $ | | $ | | $ | | $ | | $ | | $ | | $ | ( | $ | | ||||||||
Prior Cumulative | Cumulative |
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Preferred Stock | Preferred Stock | Common | Paid-In | Accumulated |
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| Series A |
| Series B |
| Series A |
| Series B |
| Stock |
| Capital |
| Deficit |
| Total | |||||||||
BALANCE, December 31, 2024 | $ | | $ | | $ | | $ | | $ | | $ | | $ | ( | $ | | ||||||||
Net loss, three months ended March 31, 2025 |
| — |
| — |
| — |
| — |
| — |
| — |
| ( |
| ( | ||||||||
BALANCE, March 31, 2025 | $ | | $ | | $ | | $ | | $ | | $ | | $ | ( | $ | | ||||||||
Prior Cumulative | Cumulative |
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Preferred Stock | Preferred Stock | Common | Paid-In | Accumulated |
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| Series A |
| Series B |
| Series A |
| Series B |
| Stock |
| Capital |
| Deficit |
| Total | |||||||||
BALANCE, June 30, 2023 | $ | | $ | | $ | | $ | | $ | | $ | | $ | ( | $ | | ||||||||
Net loss, nine months ended March 31, 2024 |
| — |
| — |
| — |
| — |
| — |
| — |
| ( |
| ( | ||||||||
BALANCE, March 31, 2024 | $ | | $ | | $ | | $ | | $ | | $ | | $ | ( | $ | | ||||||||
Prior Cumulative | Cumulative |
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Preferred Stock | Preferred Stock | Common | Paid-In | Accumulated |
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| Series A |
| Series B |
| Series A |
| Series B |
| Stock |
| Capital |
| Deficit |
| Total | |||||||||
BALANCE, June 30, 2024 | $ | | $ | | $ | | $ | | $ | | $ | | $ | ( | $ | | ||||||||
Net income, nine months ended March 31, 2025 |
| — |
| — |
| — |
| — |
| — |
| — |
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BALANCE, March 31, 2025 | $ | | $ | | $ | | $ | | $ | | $ | | $ | ( | $ | | ||||||||
The accompanying notes are an integral part of the unaudited
condensed consolidated financial statements.
(5)
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 |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net Income (Loss) | $ | | $ | ( | |||
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by/(Used in) Operating Activities: |
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Depreciation and Amortization |
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Deferred Income Amortization |
| ( |
| ( | |||
Deferred Income Taxes | | ( | |||||
Noncash Operating Lease Expense | — | | |||||
Effects of Changes in Operating Assets and Liabilities: |
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Trade Receivables |
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Inventories |
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Prepaid Expenses |
| ( |
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Accounts Payable |
| ( |
| ( | |||
Refund Liability Owed to Customers | ( | | |||||
Accrued Expenses |
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Net Cash Provided by Operating Activities |
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CASH FLOWS FROM INVESTING ACTIVITIES |
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Purchases of Property and Equipment |
| ( |
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Net Cash Used in Investing Activities |
| ( |
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CASH FLOWS FROM FINANCING ACTIVITIES |
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Proceeds from Line-of-Credit |
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Principal Payments on Line-of-Credit |
| ( |
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Proceeds from Note Payable - Stockholder (Note 7) | — | | |||||
Principal Payments on Note Payable - Stockholder (Note 7) | — | ( | |||||
Principal Payments on Note Payable |
| ( |
| ( | |||
Net Cash Used in Financing Activities |
| ( |
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INCREASE IN CASH AND CASH EQUIVALENTS |
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Cash and Cash Equivalents - Beginning of Period |
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CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | | $ | |
The accompanying notes are an integral part of the unaudited
condensed consolidated financial statements.
(6)
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)
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
For the three months ended March 31,
| 2025 |
| 2024 | |||
Sales - Chase Candy |
| $ | |
| $ | |
Sales - Seasonal Candy |
| |
| | ||
Sales |
| $ | |
| $ | |
For the nine months ended March 31,
| 2025 |
| 2024 | |||
Sales - Chase Candy |
| $ | |
| $ | |
Sales - Seasonal Candy |
| |
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Sales |
| $ | |
| $ | |
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.
(8)
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 | $ | ( | $ | ( | $ | | $ | ( | |||||
Preferred Dividend Requirements: |
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Total Dividend Requirements |
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Net Loss - Common Stockholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||
Weighted Average Shares - Basic | | | | | |||||||||
Dilutive Effect of Contingently Issuable Shares | | | | | |||||||||
Weighted Average Shares - Diluted | | | | | |||||||||
Basic and Diluted Loss per Share | $ | ( | $ | ( | $ | ( | $ | ( |
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
Nine Months Ended | |||||||
March 31, | |||||||
| 2025 |
| 2024 |
| |||
Series A | $ | | $ | | |||
Series B | $ | | $ | | |||
Series A | $ | | $ | | |||
Series B | $ | | $ | |
(9)
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
The Company has the privilege of redemption of
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 | $ | $ | — | $ | | |||
Nodaway Valley Bank | $ | | | |||||
| ||||||||
Ford Motor Credit Company, LLC | $ | | | |||||
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Total |
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Less Current Portion |
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Long-Term Portion | $ | | $ | |
Future minimum payments for the twelve months ending March 31 are:
March 31, |
| Amount | |
2026 | $ | | |
2027 | | ||
2028 | | ||
Total | $ | |
(10)
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 $
The Company recognized a net deferred tax asset of $
NOTE 5 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Nine Months Ended | |||||||
March 31, | |||||||
| 2025 |
| 2024 |
| |||
Supplemental Cash Flow Information: | |||||||
Interest paid | $ | | $ | | |||
Right-of-use asset obtained in exchange for modification of operating lease liability | $ | | $ | — |
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
(11)
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
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
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 | $ | | |
2027 | | ||
2028 |
| | |
2029 | | ||
2030 | | ||
Total Lease Payments | | ||
Less: Imputed Interest | | ||
Total Lease Liabilities | $ | |
On September 28, 2023, the Chief Executive Officer of the Company advanced the Company $
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 $
As of March 31, 2025, the Company entered into a contract for the purchase of production equipment totaling $
(12)
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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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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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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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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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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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
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.
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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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
ITEM 6.EXHIBITS
a.Exhibits.
Exhibit 31.1 |
Exhibit 32.1 |
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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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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