UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the Fiscal Year Ended
For the transition period from ______ to _______
Commission File Number:
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| (Exact name of registrant as specified in its charter) |
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(State or other jurisdiction of | (IRS Employer Identification No.) | |
Incorporation or organization) |
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(Address of principal executive offices, Zip Code)
(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 |
Indicate by check mark if the registrant is a well-known issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 of Section 15(d) of the Act. Yes ☐
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.
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 and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated 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 ☐ |
☒ | 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 has filed a report on and attestation to it management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit. Yes
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. Yes
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
Yes ☐ No ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
Aggregate market value of the voting and non-voting common stock held by non-affiliates of the Registrant as of September 20, 2024 (based on the last closing sale price as of December 31, 2023) was NO BID.
As of September 20, 2024, there were
CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED JUNE 30, 2024
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CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED JUNE 30, 2024
PART I
ITEM 1 BUSINESS
Chase General Corporation was incorporated November 6, 1944 for the purpose of manufacturing confectionery products. In 1970, Chase General Corporation acquired a 100% interest in its wholly-owned subsidiary, Dye Candy Company. Chase General Corporation and Dye Candy Company are sometimes referred herein as the Company. This subsidiary is the main operating company for the reporting entity.
Principal Products and Methods of Distribution
The subsidiary, Dye Candy Company, operates two divisions, Chase Candy Products and Seasonal Candy Products. Chase Candy Products involve production and sale of a candy bar marketed under the trade name “Cherry Mash”. The Seasonal Candy Products involve the production and sale of coconut, peanut, chocolate, and fudge confectioneries. The products of both divisions are sold to the same type of customers in the same geographical areas. In addition, both divisions share a common labor force and utilize the same basic equipment and raw materials. Management considers these two divisions as one reportable segment for inclusion in this filing.
The principal products produced are as follows:
Chase Candy Products of Dye Candy Company produces a candy bar under the trade name of “Cherry Mash”. The bar is distributed in the following case sizes:
| (1) | 60 count pack |
| (2) | 12 boxes of 24 bars per box |
| (3) | 200 count shipper box |
| (4) | 100 count shipper box |
| (5) | 100 # 2 box Counter Display |
In addition to the regular size bar, a “mini-mash” is distributed in the following case sizes:
| (1) | 24 - 12 oz. bags |
| (2) | 3 jars - 60 bars per jar |
| (3) | 23 # wrapped bars |
| (4) | 22 # unwrapped bars |
| (5) | 12 - 12 oz. bags |
| (6) | 3 - 4 # jars |
| (7) | 24 - 12 oz. clamshell containers |
| (8) | 9 - 8 oz. clamshell containers |
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CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED JUNE 30, 2024
ITEM 1 BUSINESS (CONTINUED)
Principal Products and Methods of Distribution (Continued)
Seasonal Candy Products of Dye Candy Company produces coconut, peanut, chocolate, and fudge confectioneries and purchases other outsourced products. These products are distributed in bulk or packaged. Principal products include:
(1) | Coconut Bon-Bons | (6) | Peanut Brittle |
(2) | Coconut Stacks | (7) | Peanut Clusters |
(3) | Home Style Poe Fudge | (8) | Champion Créme Drops |
(4) | Peco Flake | (9) | Jelly Candies |
(5) | Peanut Squares | (10) | Frosted Pretzels |
The Champion Crème Drops, Frosted Pretzels, and Jelly Candies are not produced by the Company.
All products are shipped to customers by shipping companies.
Competition and Market Area
The Chase Candy Products division bars are sold primarily to wholesale candy, grocery accounts, vendors, and repackers. “Cherry Mash” bars are marketed in the Midwest region of the United States. For the years ended June 30, 2024 and 2023, this division accounted for 55% and 57%, respectively, of the sales of Dye Candy Company.
The Seasonal Candy Products division is sold primarily on a Midwest regional basis to national syndicate accounts, repackers and grocery accounts. For the years ended June 30, 2024 and 2023, this division accounted for 45% and 43%, respectively of the sales of Dye Candy Company.
The Company has no government contracts, foreign operations or export sales. In addition, all domestic sales are primarily in the Midwest region of the United States.
The Company is a seasonal business whereby the largest volume of sales occur in August through December of each year. The earnings per quarter of the Company varies in direct proportion to the seasonal sales volume.
Due to the seasonal nature of the business, there is a heavier demand on working capital in the fall and winter months of the year when the Company is building its inventories in anticipation of August through December sales. The fluctuation of demand on working capital due to the seasonal nature of the business is common to the confectionery industry. If necessary, the Company has the ability to borrow short-term funds to finance operations prior to receiving cash collections from fall sales. The Company occasionally offers extended payment terms of up to sixty days. Since this practice is infrequent, the effect on working capital is minimal.
Prompt service and efficient service are traits demanded in the confectionery industry, which results in a continual low volume of back-orders. Therefore, at no time during the year does the Company have a significant amount of back-orders.
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CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED JUNE 30, 2024
ITEM 1 BUSINESS (CONTINUED)
Competition and Market Area (Continued)
Chase Candy Company seasonal products are sold in both the grocery and produce departments with bulk, prepackaged clamshell and shippers. Chase Candy Company offers a variety of quality products at a value price. The competitive set of the business does not have a national brand competitor but mostly regional competition and private label. The primary competition includes:
| 1. | Palmer Candy Company sells products that mostly mirror Chase Candy products but they market their products through the bakery department. Retail pricing on Palmer products is usually higher than Chase products. |
| 2. | Zachary Confections is another regional competitor that sells many similar items as Chase Candy and are also priced at retail similar to Chase. |
| 3. | The low price competitor is Private Label and depending on location, they have products that are of the same variety as Chase Candy products. Product quality is usually not at the same level as Chase products. |
Principal methods of competition the Company uses include quality of product, price, reduced transportation costs due to central location, and service. The Company’s competitive position is positively influenced by labor costs being lower than industry average. Chase General Corporation is firmly established in the confectionery market and through its operating divisions has many years of experience associated with its name.
Research and Development
The Company has not developed any new products for the years ended June 30, 2024 and 2023.
Raw Materials and Principal Suppliers
Raw materials and packaging materials are produced on a national basis with products coming from locations throughout the United States. Raw materials and packaging materials are generally widely available, depending on common market influences. Two suppliers accounted for more than 24% of the Company’s cost of sales for the year ended June 30, 2024 and for more than 25% of the Company’s costs of sales for the year ended June 30, 2023.
Patents and Trademarks
The largest single revenue producing product, the “Cherry Mash” bar, is protected by a trademark registered with The United States Patent and Trademark Office. The Company considers this trademark significant to operations. This trademark expires in the year 2029.
Employees
As of June 30, 2024, the Company had 17 full-time employees. This expands to approximately 30 full-time personnel during the busy production months of August through December.
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CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED JUNE 30, 2024
ITEM 1 BUSINESS (CONTINUED)
Customers
For the years ended June 30, 2024 and 2023, one customer accounted for 38% and 42%, respectively, of sales. As of June 30, 2024 and 2023, that same customer accounted for 28% and 47%, respectively, of trade receivables. For the years ended June 30, 2024 and 2023, another customer and its affiliates accounted for 7% and 6%, respectively, of sales. As of June 30, 2024 and 2023, that same customer and its affiliates accounted for 15% and 12%, respectively, of trade receivables. No other customer accounted for more than 10% of the Company’s sales for the years ended June 30, 2024 and 2023. No other customers accounted for more than 10% of the Company’s trade receivables for the years ended June 30, 2024 and 2023.
Environmental Protection and the Effect on Probable Government Regulations on the Business
To the best of management’s knowledge, the Company is presently in compliance with all environmental laws and regulations and does not anticipate any future expenditures in this regard. The Company has evaluated the requirements of the Food Safety Modernization Act (FSMA). The FSMA aims to ensure the U.S. food supply is safe by shifting the focus of federal regulators from responding to contamination to preventing it. The FSMA has given the Food and Drug Administration (FDA) new authorities to regulate the way foods are grown, harvested, and processed. As of the fiscal year ended June 30, 2024 and through the filing of this form, management believes the Company is compliant with all FSMA requirements. Another inspection for compliance will be conducted by a third party within 12 months of year-end. Management does not anticipate any future significant expenditures in the next twelve months in this regard.
Need for Government Approval of Principal Products or Services
The Company is required to meet the Food and Drug Administration guidelines for proper labeling of its products and for contents of its products. Management does not anticipate any future significant expenditures in the next twelve months in this regard.
Reports to Security Holders
The Registrant is not required to send the annual audit report, annual 10-K report and quarterly 10-Q reports to security holders since the stock is not actively traded. These reports are available at the Registrant’s registered office or they are available online on the SEC’s EDGAR website.
ITEM 1ARISK FACTORS
Not applicable to a smaller reporting company.
ITEM 1BUNRESOLVED STAFF COMMENTS
The Company has no unresolved SEC staff comments at June 30, 2024.
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CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED JUNE 30, 2024
ITEM 1CCYBERSECURITY
Risk Management and Strategy:
Currently, the Company has basic cybersecurity measures in place, such as password protection and antivirus software. However, the Company acknowledges that these measures may not be sufficient to protect against more sophisticated cyber threats. The Company does not currently perform regular comprehensive cybersecurity risk assessments. There is a recognized need to develop a formalized approach to identifying and mitigating cybersecurity risks. The Company lacks a formalized incident response plan. In the event of a cybersecurity incident, the Company would rely on ad-hoc measures to respond and manage the situation. The Company recognizes the need to improve its cybersecurity posture. Planned future initiatives include developing a formal incident response plan, conducting a cybersecurity risk assessment, and exploring additional protective measures, such as data encryption and enhanced network security protocols. However, the timing and extent of these improvements are contingent on available resources.
Governance and Oversight:
Currently, the Company does not have dedicated personnel or committees for cybersecurity risk oversight. Cybersecurity matters are informally reported to senior management as needed. The board of directors is informed of cybersecurity risks on an as-needed basis but does not actively oversee cybersecurity strategy. The Company will continue evaluating the need to hire a cybersecurity expert or consultant to enhance its cybersecurity governance and oversight. The Company has not experienced any material cybersecurity incidents in the past year. However, due to the current limited cybersecurity measures, the risk of future incidents remains significant.
ITEM 2 PROPERTIES
We conduct our operations from two buildings as follows:
Chase Warehouse – This building is located in St. Joseph, Missouri and is owned by Dye Candy Company, a wholly-owned subsidiary of the registrant. The facility is currently devoted entirely to the storage of supplies, and the warehousing and shipping of candy products. This warehouse is over seventy years old, is in fair condition and adequate to meet present requirements. The warehouse has approximately 15,000 square feet and is not encumbered.
Chase General Office and Dye Candy Company Operating Plant – This building is located in St. Joseph, Missouri and contains the general offices (of approximately 2,000 square feet) for Chase General Corporation, Dye Candy Company and its divisions. The production plant of Dye Candy Company occupies the remainder of the building or 18,000 square feet. The building, specifically designed for the Company, is leased from an entity that is owned by the son of the Chief Executive Officer of the Company. The annual rental expense of this facility was $78,000 for each year ended June 30, 2024 and 2023.
The net book value of our premises, land and office, and production equipment totaled $206,872 and $198,130 at June 30, 2024 and 2023, respectively.
We believe both facilities are adequately covered by insurance.
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CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED JUNE 30, 2024
ITEM 3 LEGAL PROCEEDINGS
None.
ITEM 4 MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5 MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market information
There is no established public trading market for the common stock (par value $1 per share) of the Company.
Security holders
As of September 20, 2024, the latest practicable date, the approximate number of record holders of common stock was 1,869, including individual participants in security listings.
Dividends
| (1) | Dividend history and restrictions |
No dividends have been paid during the past two fiscal years and there are no dividend restrictions. Preferred stock dividends in arrears are accumulated.
| (2) | Dividend policy |
There is no set policy on the payment of dividends due to the financial condition of the Company and other factors. It is not anticipated that cash dividends will be paid in the foreseeable future.
Securities authorized for issuance under equity compensation plans
The Company does not have any equity compensation plans.
ITEM 6 SELECTED FINANCIAL DATA
Not applicable to a smaller reporting company.
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CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED JUNE 30, 2024
ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
This report contains statements that plan for or anticipate the future. Forward-looking statements may include statements about the future of our products and the industry, statements about our future business plans and strategies, and other statements that are not historical in nature. In this report, forward-looking statements are generally identified by the words “estimate,” “project,” “anticipate,” “expect,” “intend,” “believe,” and the like. Readers should carefully review these cautionary statements as they identify certain important factors that could cause actual results to differ materially from those in the forward-looking statements and from historical trends. These forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by, the Company at the time the statements are made. These expectations, assumptions, and uncertainties include: the Company’s expectation of heavier demand on working capital in the fall and winter months in anticipation of August through December sales; the assumption that the Company has stabilized its customer base and will continue its efforts to expand the existing market area and increase sales to customers; and the expectation that the Company will maintain tight control of all expenditures.
Overview
During fiscal year ended June 30, 2024, the Company’s sales were $3,395,505, as compared to sales of $3,446,234 for fiscal year ended June 30, 2023. The 1.4% decrease in sales is attributable to change in composition of sales between Chase Candy Products division and the Seasonal Candy Products division. The Chase Candy Products division, which historically has a higher average price, incurred a volume of sales decline by 2.8% while the Seasonal Candy Products division experienced volume increases of 2.7%. Additionally, the 7.6% increase in cost of sales and 3.4% increase in operating expenses resulted in a change in profitability during the year, as reflected in the loss from operations of $98,626 for fiscal year 2024 compared to the income from operations of $163,363 for fiscal year 2023. Working capital decreased $121,446 to $561,091 for the fiscal year 2024 from $682,537 for the fiscal year 2023 due primarily to a decrease in inventory and corresponding increase in accounts payable.
The following information should be read together with the consolidated financial statements and notes thereto included elsewhere herein.
Critical Accounting Policies and Estimates
General
Management’s discussion and analysis of financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The preparation of these consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
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CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED JUNE 30, 2024
ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Critical Accounting Policies and Estimates (continued)
General(continued)
The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.
Revenue Recognition
The Company recognizes revenues as product is shipped to customers. Sales are comprised of the total sales billed during the period, including shipping and handling charges to the customer, less the estimated returns, customer allowances, customer discounts, billbacks and advertising.
Inventories
Raw material and packaging material inventories are carried at the “lower of cost or net realizable value,” with cost being determined on the “first-in, first-out” basis of accounting. The cost of goods in process include an estimate for manufacturing overhead. Finished goods inventory are valued using the lower of cost or market value, determined by the retail inventory method. Under the retail inventory method, the valuation of finished goods inventory at cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to the retail value of inventories.
Results of Operations
The following table sets forth for the years indicated, the percentage of sales of certain items in the Company’s consolidated statements of operations for the years ended June 30, 2024 and 2023, respectively:
| For the Years Ended |
|
| |||
June 30, |
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| 2024 |
| 2023 |
|
| |
Sales |
| 100 | % | 100 | % |
|
Cost of Sales |
| 75 | % | 69 | % |
|
Gross Profit on Sales |
| 25 | % | 31 | % |
|
Operating Expenses |
| 28 | % | 27 | % |
|
Income (Loss) from Operations |
| (3) | % | 4 | % |
|
Other Expense, Net |
| — | % | — | % |
|
Income (Loss) before Income Taxes |
| (3) | % | 4 | % |
|
Income Tax Provision (Benefit) |
| — | % | — | % |
|
Net Income (Loss) |
| (3) | % | 4 | % |
|
Fiscal Year 2024 Compared to Fiscal Year 2023
Sales
During the year ended June 30, 2024, sales, net of returns and allowances, decreased $50,729 or 1.5% as compared to the year ended June 30, 2023. Sales for Chase Candy products decreased $74,367 or 3.8% to $1,882,291 for the year ended June 30, 2024 compared to $1,956,658 for the year ended June 30, 2023. Sales for Seasonal Candy products increased $23,638 or 1.6% to $1,513,214 for the year ended June 30, 2024 as compared to $1,489,576 for the year ended June 30, 2023.
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CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED JUNE 30, 2024
ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Fiscal Year 2024 Compared to Fiscal Year 2023 (Continued)
Sales (continued)
Sales for Chase Candy consisted of the following divisions: L276 Cherry Mash Distributor Pack division, L100/L200 Cherry Mash Merchandisers division, L260 Changemaker Jar division, L279/L299 Bulk Mini Mash division, and L278/L212 Mini Mash division. The 3.8% decrease in sales of Chase Candy of $74,367 for the year ended June 30, 2024 over the same period ended June 30, 2023, is primarily due to the following: 1) decreased sales of the L276/L277 Cherry Mash Bar division by approximately $31,000 versus the same period a year ago, primarily due to a decrease in orders from existing customers, 2) decreased sales of the L278/L212 Mini Mash segment by approximately $32,000 versus the same period a year ago, primarily due to a decrease in orders from existing customers, 3) increased sales allowances and discounts related to this category of product of approximately $25,000 offset by 4) increased sales of the L100/L200 Cherry Mash Merchandisers division by approximately $11,500, primarily due to an increase in orders from existing customers, and 5) increased sales of the L260 Changemaker Jar and L264 Mini Mash Keg divisions by approximately $2,000 versus the same period a year ago, primarily due to an increase in orders from existing customers.
Sales for Seasonal Candy consisted of the following divisions: bulk seasonal division, clamshell seasonal division, and the generic seasonal division. The 1.6% increase in sales of Seasonal Candy of $23,638 for the year ended June 30, 2024 over the same period ended June 30, 2023, is primarily due to 1) increased sales in the generic seasonal division by approximately $85,000 versus the same period a year ago, primarily due to increased orders from existing customers, offset by 2) decreased sales in the bulk seasonal division by approximately $25,000 due to decreased orders from existing customers and 3) decreased sales in the clamshell seasonal division by approximately $15,000 versus the same period a year ago, primarily due to decreased orders from existing customers 4) increased sales allowances and discounts related to these category of products of approximately $21,000.
Cost of Sales
Cost of sales for the year ended June 30, 2024, as compared to the year ended June 30, 2023, increased by 7.6%. The cost of sales increased $180,090 to $2,542,003 while increasing to 74.9% of sales for the year ended June 30, 2024, compared to $2,361,913 or 68.5% of sales for the year ended June 30, 2023.
The 7.6% increase in cost of sales of $180,090 is related to increases in prices of raw materials and increased labor rates. 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.
Labor costs, including wages, vacation pay and payroll taxes of $873,483 for the year ended June 30, 2024, increased 9.6% or $76,331 as compared to $797,152 for the year ended June 30, 2023 primarily due to increased production wages due to increased hours, bonuses, and pay rates compared to the same period ended June 30, 2023. All employees were given a 5-10% raise at the end of January 2023.
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CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED JUNE 30, 2024
ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Fiscal Year 2024 Compared to Fiscal Year 2023 (Continued)
Gross Profit on Sales
The gross profit decreased 21.3% or $230,819 to $853,502, which is 25.1% of related sales for the year ended June 30, 2024, as compared to $1,084,321 or 31.5% of related sales for the year ended June 30, 2023, as a net result of the 7.6% increase in cost of sales described above and the 1.5% decrease in sales. The Company was able to implement a price increase in March 2024 of approximately 14% for the majority of the customers for Chase Candy products, after which gross profit on sales still declined by 1% compared to the nine months ended March 31, 2024. Due to the seasonal nature of the Company’s business and the fact that the Company’s largest customer continues to have price increases at lower negotiated rates, the majority of these price increases will not be fully realized until the first and second quarter of fiscal year 2025. Additionally, management intends to increase prices on seasonal candy between 14-20% during the first half of fiscal year 2025.
Selling Expenses
Selling expenses for the year ended June 30, 2024 decreased $2,918 to $340,816, which is 10% of sales, compared to $343,734 or 10% of sales for the year June 30, 2023. This decrease is primarily due to efforts to minimize selling expenses in an attempt to recover costs not passed along with price increases. Specifically, commission expense decreased $7,358 to $137,430 for the year ended June 30, 2024, as compared to $144,788 for the year ended June 30, 2023, due to decrease in sales. However, these savings were offset by an increase in depreciation expense of $5,511 to $34,546 for the year ended June 30, 2024, as compared to $29,035 for the year ended June 30, 2023, primarily due to purchases of new vehicles, as well as miscellaneous increases in other costs associated with selling expenses.
General and Administrative Expenses
General and administrative expenses for the year ended June 30, 2024 increased $34,088 to $611,312, which is 18% of sales, compared to $577,224 or 16.7% of sales for the year ended June 30, 2023. The increase is primarily due to increases in office salaries of approximately $11,000, increases in payroll tax expense of approximately $5,000, increases in insurance expense of approximately $7,000, plus approximately $10,000 attributable to miscellaneous decreases in other costs associated with general and administrative expenses. Additionally, the Company had a gain on sale of property and equipment of approximately $44,000 recorded in the prior year, compared to a current year gain on sale of property and equipment of approximately $23,000.
Other Income (Expense)
Other income (expense) reflects expense of $(13,098) for the year ended June 30, 2024, as compared to expense of $(6,196) for the year ended June 30, 2023. This increase of $6,902 in other expense was primarily due to an increase in interest expense for the year ended June 30, 2024 due to rising interest rates and increased borrowings during the year ended June 30, 2024.
Income Tax Benefit (Provision)
The Company recorded an income tax benefit for the year ended June 30, 2024 of $19,647, the majority of which is attributable to the current net operating loss carryforwards. The Company recorded no income tax benefit or provision for the year ended June 30, 2023
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CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED JUNE 30, 2024
ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Fiscal Year 2024 Compared to Fiscal Year 2023 (Continued)
Net Income (Loss)
Net loss for the year ended June 30, 2024 was $(92,077), compared to a net income for the year ended June 30, 2023 of $157,167. This decrease of $249,244 is the result of those items previously discussed.
Preferred Dividends
Preferred dividends were $128,072 for the years ended June 30, 2024 and June 30, 2023, 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 Income (Loss) Applicable to Common Stockholders
Net income (loss) applicable to common stockholders for the year ended June 30, 2024 was $(220,149) which is an decrease of $249,244 as compared to the net income applicable to common stockholders for the year ended June 30, 2023 of $29,095.
Liquidity and Sources of Capital
The table below presents the summary of cash flow for the fiscal year indicated.
| For the Years Ended |
| |||||
June 30, | |||||||
| 2024 |
| 2023 |
| |||
Net Cash Provided by/(Used in) Operating Activities | $ | 117,100 | $ | (52,524) | |||
Net Cash Used in Investing Activities | $ | (31,088) | $ | (32,683) | |||
Net Cash Provided by/(Used in) Financing Activities | $ | (55,333) | $ | 82,991 | |||
Management has made no material commitments for capital expenditures for fiscal 2024. The cash provided by or used in operating, investing and financing activities for the year ended June 30, 2024 is fully detailed in the consolidated statement of cash flows.
Overall cash and cash equivalents increased $30,679 to $41,974 at June 30, 2024 from $11,295 at June 30, 2023.
At June 30, 2024, the Company’s accumulated deficit was $5,661,645, compared to an accumulated deficit of $5,569,568 as of June 30, 2023. Working capital as of June 30, 2024 decreased $121,446 to $561,091 from $682,537 as of June 30, 2023.
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CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED JUNE 30, 2024
ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Fiscal Year 2024 Compared to Fiscal Year 2023 (Continued)
Liquidity and Sources of Capital (continued)
The Company’s lease on its office and plant facility is effective through March 31, 2025, with an option to extend for an additional term of five years. During the year ended June 30, 2023, the Company determined the exercise of the renewal option is reasonably assured and therefore remeasured the right-of-use asset and lease liability to include the additional five years at the current rate so that the new term expires on March 31, 2030. The lease currently requires payments of $6,500 per month, as noted the Company does not believe the payments in the renewal period will vary significantly from this current amount. The facility is leased from an entity that is owned by the son of the Chief Executive Officer of the Company.
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 will be sufficient to meet its funding requirements for the foreseeable future.
ITEM 7AQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable to a smaller reporting company.
ITEM 8 CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements meeting the requirements of Regulation S-B are contained on pages 16 through 37 of this Form 10-K.
(14)
CHASE GENERAL CORPORATION AND SUBSIDIARY
CONSOLIDATED FINANCIAL REPORT
TABLE OF CONTENTS
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID: | 16 | |
CONSOLIDATED FINANCIAL STATEMENTS | ||
17 | ||
19 | ||
20 | ||
21 | ||
22 | ||
(15)
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of
Chase General Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Chase General Corporation and its subsidiary (the Company) as of June 30, 2024 and 2023, the related consolidated statements of operations, stockholders' equity and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements, and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/
We have served as the Company's auditor since 2022.
September 20, 2024
(16)
CHASE GENERAL CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2024 AND 2023
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| June 30, | June 30, | |||
2024 |
| 2023 | ||||
ASSETS |
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CURRENT ASSETS |
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Cash and Cash Equivalents | $ | | | |||
Trade Receivables, Net of Allowance for Credit Losses of $ | | | ||||
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 | ||||||
Property & Equipment |
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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 |
| ( | ( | |||
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 consolidated financial statements.
(17)
CHASE GENERAL CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (CONTINUED)
JUNE 30, 2024 AND 2023
| June 30, | June 30, | ||||
| 2024 |
| 2023 | |||
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 | | |||||
Deferred Income |
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Total Long-Term Liabilities |
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Total Liabilities |
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COMMITMENTS AND CONTINGENCIES (NOTE 8) | ||||||
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 consolidated financial statements.
(18)
CHASE GENERAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
| For the Years Ended | ||||||
June 30, | |||||||
2024 |
| 2023 | |||||
SALES | $ | | $ | | |||
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COST OF SALES | | | |||||
Gross Profit on Sales | | | |||||
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OPERATING EXPENSES |
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Selling | | | |||||
General and Administrative | | | |||||
Total Operating Expenses | | | |||||
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Income (Loss) from Operations | ( | | |||||
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OTHER INCOME (EXPENSE) |
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Miscellaneous Income | | | |||||
Interest Expense | ( | ( | |||||
Total Other Income (Expense), net | ( | ( | |||||
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Income (Loss) before Income Taxes | ( | | |||||
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INCOME TAX BENEFIT (PROVISION) | |||||||
Current tax expense | ( | — | |||||
Deferred tax benefit | | — | |||||
Total Income Tax Benefit (Provision) | | — | |||||
NET INCOME (LOSS) | $ | ( | $ | | |||
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EARNINGS (LOSS) PER SHARE |
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Basic and Diluted | $ | ( | $ | | |||
The accompanying notes are an integral part of the consolidated financial statements.
(19)
CHASE GENERAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
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, 2022 | $ | | $ | | $ | | $ | | $ | | $ | | $ | ( | $ | | ||||||||
Net Income |
| — |
| — |
| — |
| — |
| — |
| — |
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BALANCE, June 30, 2023 | | | | | | | ( | | ||||||||||||||||
Net Loss |
| — |
| — |
| — |
| — |
| — |
| — |
| ( |
| ( | ||||||||
BALANCE, June 30, 2024 | $ | | $ | | $ | | $ | | $ | | $ | | $ | ( | $ | | ||||||||
The accompanying notes are an integral part of the consolidated financial statements.
(20)
CHASE GENERAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
For the Year Ended | |||||||
June 30, | |||||||
| 2024 |
| 2023 |
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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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Allowance for Credit Losses |
| — |
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Deferred Income Amortization |
| ( |
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Gain on Sale of Property and Equipment | ( | ( | |||||
Deferred income taxes | ( | — | |||||
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 |
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Refund Liability Owed to Customers | | | |||||
Accrued Expenses |
| ( |
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Operating Lease Liability | | ( | |||||
Net Cash Provided by/(Used in) Operating Activities |
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CASH FLOWS FROM INVESTING ACTIVITIES |
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Proceeds from Disposal of Property and Equipment | — | | |||||
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 | | — | |||||
Proceeds from Note Payable - Stockholder | | — | |||||
Principal Payments on Note Payable - Stockholder |
| ( |
| — | |||
Principal Payments on Notes Payable |
| ( |
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Net Cash Provided by/(Used in) Financing Activities |
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INCREASE (DECREASE) 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 consolidated financial statements.
(21)
CHASE GENERAL CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
NOTE 1 NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Chase General Corporation (the Company) was incorporated on November 6, 1944 in the state of Missouri for the purpose of manufacturing confectionery products. The Company grants credit terms to substantially all customers, consisting of repackers, grocery accounts, and national syndicate accounts, who are primarily located in the Midwest region of the United States.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Dye Candy Company. All intercompany transactions and balances have been eliminated in consolidation.
Segment Reporting of the Business
The subsidiary, Dye Candy Company, operates
Use of Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
Shipping and Handling Costs
Shipping and handling costs for freight expense on goods shipped are included in cost of sales. Freight expense on goods shipped for the years ended June 30, 2024 and 2023 was $
Trade Receivables
Trade receivables are uncollateralized customer obligations which generally require payment within
(22)
CHASE GENERAL CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
NOTE 1 NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Trade Receivables (Continued)
The carrying amount of trade receivables is reduced by an allowance for credit losses that reflects management’s best estimate of amounts that will not be collected. The Company provides an allowance for credit losses, which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions adjusted for current conditions and reasonable and supportable forecasts. All accounts or portions thereof deemed to be uncollectible, or that require an excessive collection cost, are written off to the allowance for credit losses.
Inventories
Raw material and packaging material inventories are carried at the “lower of cost or net realizable value,” with cost being determined on the “first-in, first-out” basis of accounting. The cost of goods in process include an estimate for manufacturing overhead. Finished goods inventory are valued using the lower of cost or market value, determined by the retail inventory method. Under the retail inventory method, the valuation of finished goods inventory at cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to the retail value of inventories.
Property and Equipment
The Company’s property and equipment is recorded at cost and is being depreciated on straight-line method over the following estimated useful lives:
Buildings |
| |
Machinery and equipment | ||
Trucks and autos | ||
Office equipment | ||
Leasehold improvements |
Impairment of Long-Lived Assets
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceed the fair value of the assets.
(23)
CHASE GENERAL CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
NOTE 1 NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
Deferred income taxes are provided using the liability method for temporary differences between financial statement and income tax reporting. Temporary differences are differences between the amounts of assets and liabilities reported for financial statement purposes and their tax bases. Deferred income tax assets are recognized for temporary differences that will be deductible in future years’ tax returns and for operating loss and tax credit carryforwards. Deferred income tax assets are only recognized if it is more likely than not that a tax position will be realized or sustained upon examination by the relevant taxing authority. Deferred income tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some or all of the deferred income tax assets will not be realized. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon settlement with a taxing authority that has full knowledge of relevant information. Deferred income tax liabilities are recognized for temporary differences that will be taxable in future years’ tax returns. Deferred income tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the dates of enactment. As of June 30, 2023, the full valuation allowance previously established was removed. The deferred income tax balance as of June 30, 2024 as shown on the accompanying consolidated balance sheet and is expected to be fully utilized.
The Company’s policy is to evaluate uncertain tax positions under the guidance as prescribed by ASC 740, Income Taxes. As of June 30, 2024 and 2023, the Company has not identified any uncertain tax positions requiring recognition in the consolidated financial statements. The Company had
Earnings Per Common Share
Basic earnings per common share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per common share shall be computed by including contingently issuable shares with the weighted average shares outstanding during the period. When inclusion of the contingently issuable shares would have an antidilutive effect upon earnings per share, diluted earnings per share will be calculated in the same manner as basic earnings per share.
Recently Issued Pronouncements
Effective July 1, 2023, the Company adopted ASU 2016-13, Financial Instrument – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments related to the impairment of financial instruments using the modified retrospective approach, which applies Topic 326 at the beginning of the earliest period presented. This guidance, commonly referred to as Current Expected Credit Loss (“CECL”), changes impairment recognition to a model that is based on expected losses rather than incurred losses. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including trade receivables. The Company evaluated and determined the amendment did not have a material affect on the condensed consolidated financial statement.
(24)
CHASE GENERAL CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
NOTE 1 NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue Recognition
The majority of the Company’s 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 sheets 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 add, 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. The adjustments recognized for the year ended June 30, 2024 and 2023 resulting from updated estimates of revenue for prior year product sales were not significant. The Company has elected a
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
The various divisions of revenue are as follows:
| 2024 |
| 2023 | |||
SALES | ||||||
Chase Candy |
| $ | |
| $ | |
Seasonal Candy |
| |
| | ||
Total |
| $ | |
| $ | |
(25)
CHASE GENERAL CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
NOTE 2 FORGIVABLE LOAN AND DEFERRED INCOME
During 2004, the Company received a $
NOTE 3 NOTES PAYABLE
The Company’s long-term debt at June 30, 2024 and 2023 consists of:
June 30, | June 30, | |||||||
Payee |
| Terms |
| 2024 |
| 2023 | ||
Nodaway Valley Bank | $ | $ | | $ | — | |||
Nodaway Valley Bank | $ |
| — | | ||||
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Nodaway Valley Bank | $ | | — | |||||
Ford Motor Credit Company | $ |
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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 June 30 are:
June 30, |
| Amount | |
2025 | $ | | |
2026 | | ||
2027 | | ||
Total | $ | | |
(26)
CHASE GENERAL CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
NOTE 4 CAPITAL STOCK
Capital stock authorized, issued, and outstanding as of June 30, 2024 is as follows:
Shares | ||||
Issued and | ||||
| Authorized |
| Outstanding | |
Prior Cumulative Preferred Stock, $ | ||||
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Series A |
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Series B |
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Cumulative Preferred Stock, $ | ||||
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Series A |
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Series B |
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Common Stock, $ | ||||
Reserved for Conversion of Preferred Stock - |
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Cumulative Preferred Stock dividends in arrears at June 30, 2024 and 2023 totaled $
For the Year Ended | |||||||
June 30, | |||||||
| 2024 |
| 2023 |
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Series A | $ | | $ | | |||
Series B | $ | | $ | | |||
Series A | $ | | $ | | |||
Series B | $ | | $ | | |||
The
The Company has the privilege of redemption of
(27)
CHASE GENERAL CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
NOTE 5 INCOME TAXES
Management believes the income tax positions taken for open years are appropriately stated and supported for all open years. The Company’s federal tax returns for the years ended June 30, 2023, 2022, and 2021 are subject to examination by the Internal Revenue Service taxing authority.
The sources of deferred income tax assets and liabilities at June 30, 2024 and 2023 are as follows:
June 30, | June 30, | |||||
| 2024 |
| 2023 | |||
Deferred tax assets: | ||||||
Allowance for Credit Losses | | | ||||
Deferred Income |
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Contribution Carryover |
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Other |
| — |
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Net operating loss carryforwards |
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Deferred tax liabilities: | ||||||
Book/Tax Difference on Property and Equipment |
| ( |
| ( | ||
( | ( | |||||
Net deferred tax asset before valuation allowance | | — | ||||
Valuation allowance: | ||||||
Beginning balanace | — | ( | ||||
Decrease/(Increase) during the period | — | | ||||
Ending balance | — | — | ||||
Net deferred tax asset | $ | | $ | — | ||
The income tax provision differs from the amount of income tax determined by applying the statutory federal income tax rate to pretax income (loss) for the years ended June 30, 2024 and 2023 due to the following:
For the Years Ended | ||||||
June 30, | ||||||
| 2024 |
| 2023 | |||
Computed at statutory rate | $ | ( | $ | | ||
Increase (decrease) resulting from: | ||||||
State income taxes - net of federal tax benefit | ( | | ||||
Change in deferred tax asset valuation allowance |
| — |
| ( | ||
Other |
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| ( | ||
Actual tax (benefit) provision | $ | ( | $ | — | ||
The Company has available at June 30, 2024, $
(28)
CHASE GENERAL CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
NOTE 6 EARNINGS (LOSS) PER SHARE
The earnings (loss) per share for the years ended June 30, 2024 and 2023, respectively, was computed on the weighted average of outstanding common shares during the year as follows:
For the Years Ended | |||||||
June 30, | |||||||
| 2024 |
| 2023 |
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Net Income (Loss) | $ | ( | $ | | |||
Preferred Dividend Requirements: |
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Total Dividend Requirements |
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Net Income (Loss) attributable to Common Stockholders | $ | ( | $ | | |||
Weighted Average Shares - Basic | | | |||||
Effect of Contingently Issuable Shares, if Dilutive | | | |||||
Weighted Average Shares - Diluted | | | |||||
Basic and Diluted Earnings (Loss) per Share | $ | ( | $ | | |||
Contingently issuable shares were not included in the 2024 or 2023 diluted earnings per common share as they would have an antidilutive effect upon earnings per share.
The following table details out the contingently issuable shares for the years ended June 30, 2024 and 2023.
| 2024 |
| 2023 | |
Shares Issuable Upon Conversion of Series A Prior Cumulative Preferred Stock |
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Shares Issuable Upon Conversion of Series B Prior Cumulative Preferred Stock |
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Shares Issuable Upon Conversion of Series A Cumulative Preferred Stock |
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Shares Issuable Upon Conversion of Series B Cumulative Preferred Stock |
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Total Dilutive Effect of Contingently Issuable Shares |
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NOTE 7 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
For the Years Ended | |||||||
June 30, | |||||||
| 2024 |
| 2023 |
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Supplemental Cash Flow Information: | |||||||
Interest paid | $ | | $ | | |||
Right-of-use asset obtained in exchange for modification of operating lease liability | $ | — | $ | | |||
Proceeds received on trade-in of vehicle | $ | | $ | — | |||
Note Payable obligation incurred for vehicle | $ | — | $ | | |||
(29)
CHASE GENERAL CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
NOTE 8 COMMITMENTS, 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 owned by the son of the Chief Executive Officer of the Company. The lease term is from February 1, 2005 through March 31, 2025 with an
Operating lease right-of-use asset and 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. Additionally, any other short-term leases are immaterial. The Company elected the
Minimum annual payments required under existing operating lease liabilities that have initial or remaining noncancelable terms in excess of one year as of June 30, 2024 are as follows:
Twelve Months Ending June 30, |
| Amount | |
2025 | $ | | |
2026 |
| | |
2027 |
| | |
2028 | | ||
2029 | | ||
Thereafter | | ||
Total Lease Payments | | ||
Less: Imputed Interest | ( | ||
Total Lease Liabilities | $ | | |
On September 28, 2023, the Chief Executive Officer of the Company advanced the Company $
As of June 30, 2024, the Company had raw materials purchase commitments with
(30)
CHASE GENERAL CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
NOTE 9 DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company’s financial instruments consist principally of cash and cash equivalents, trade receivables and payables, and notes payable. There are no significant differences between the carrying value and fair value of any of these financial instruments.
NOTE 10 CONCENTRATION OF CREDIT RISK
For the years ended June 30, 2024 and 2023,
NOTE 11 SUBSEQUENT EVENTS
The Company monitors significant events occurring after June 30, 2024 and prior to the issuance of the financial statements to determine the impact, if any, of the events on the consolidated financial statements to be issued. All subsequent events of which the Company is aware were evaluated through the filing date of this Form 10-K.
(31)
CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable
ITEM 9ACONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The Company’s principal executive officer, who is also the chief financial and accounting officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act), as of the end of the period covered by this report. Based on such evaluation, such officer has concluded that the Company’s disclosure controls and procedures are 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.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rue 13a-15(f) and 15d-15(f) of the Exchange Act) of the Company. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
Management, under the supervision of the Company’s principal executive, who is also the chief financial and accounting officer, conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in 2013 Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was not effective as of June 30, 2024 under the criteria set forth in the 2013 Internal Control – Integrated Framework.
(32)
CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
ITEM 9ACONTROLS AND PROCEDURES (CONTINUED)
Management’s Report on Internal Control over Financial Reporting (Continued)
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has determined that material weaknesses exist due to the following reasons:
| ● | The Company has an ineffective control environment due to the lack of the necessary corporate accounting resources with SEC financial reporting experience to ensure consistent, complete and accurate financial reporting, as well as disclosure controls and procedures. The Company has outsourced the financial reporting function to a qualified accounting firm; however, the Company does not have the internal resources to maintain appropriate disclosure controls and procedures. |
| ● | The Company has limited resources to ensure that necessary internal controls are implemented and followed throughout the Company. The limited resources result in a lack of adequate segregation of duties relating to the authorization, recognition, capture, and review of transactions, facts, circumstances and events that could have a material impact on the Company’s financial reporting process. |
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.
Changes in Internal Controls
There were no significant changes in the Company’s internal controls over financial reporting or in other factors that in management’s estimates are reasonably likely to materially affect the Company’s internal controls over financial reporting subsequent to the date of the evaluation.
ITEM 9B OTHER INFORMATION
(33)
CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
PART III
ITEM 10DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
| (a) | Directors |
Periods of Service | ||||||
Name |
| Age |
| as Director |
| Terms |
Barry M. Yantis | 79 | 1980 to Present | One Year | |||
Brian A. Yantis |
| 76 |
| 1986 to Present |
| One Year |
|
| Years of |
|
| ||
Service as | ||||||
Name |
| Age |
| an Officer |
| Term |
Barry M. Yantis |
| 79 |
| 45 |
| Until Successor |
Elected | ||||||
Brian A. Yantis |
| 76 |
| 32 |
| Until Successor |
Elected |
| (b) | Certain Significant Employees |
There are no significant employees other than above.
| (c) | Family Relationships |
Barry M. Yantis and Brian A. Yantis are brothers.
Business Experience
| (1) | Barry M. Yantis, President and Treasurer has been an officer of the Company for 45 years, 13 years as Vice-President and 32 years as President. He has been on the board of directors for 45 years and has been associated with the candy business for 49 years. |
Brian A. Yantis, Secretary has been an officer of the Company since May 1992. Until retiring in 2011, he had been associated with the insurance business for 37 years and was a Vice-President of Aon Risk Services in Chicago, Illinois for 22 years.
| (2) | The directors and executive officers listed above are also the directors and executive officers of Dye Candy Company. |
(d)Involvement in Certain Legal Proceedings
Not applicable
(e)Audit Committee Financial Expert
The board of directors are not considered audit committee financial experts, but do effectively operate as the audit committee.
(34)
CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
ITEM 10DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE (CONTINUED)
(f)Code of Ethics
The Company has adopted a Code of Business Conduct and Ethics that applies to all executive officers, directors, and employees of the Company. The Code of Business Conduct and Ethics will be provided to any person without charge upon request.
ITEM 11EXECUTIVE COMPENSATION
(a)General
Executive officers are compensated for their services as set forth in the Summary Compensation Table. These salaries are approved yearly by the board of directors.
(b)Summary Compensation Table
|
|
|
|
|
|
| Long-Term Compensation | ||||||||||||
| Other | Restricted |
|
|
| ||||||||||||||
Fiscal | Annual | Stock | Option | LTIP | All Other | ||||||||||||||
Name |
| Year End |
| Salary |
| Bonus |
| Compensation |
| Award (s) |
| SARs (#) |
| Payouts |
| Compensation | |||
Barry M. Yantis | 6/30/2024 | $ | 130,000 | — | $ | 3,000 | — | — | — | — | |||||||||
Barry M. Yantis | 6/30/2023 | 123,334 | — | 1,640 | — | — | — | — | |||||||||||
Barry M. Yantis |
| 6/30/2022 | 113,333 |
| — | 2,640 |
| — |
| — |
| — |
| — | |||||
1) CEO, President and Treasurer
2) No other compensation than that which is listed in compensation table.
3) No other officers have compensation over $100,000 for their services besides those listed in this compensation table.
(c)Option/SAR grants table
Not applicable
(d)Aggregated option/SAR exercises and fiscal year-end option/SAR value table
Not applicable
(e)Long-term incentive plan awards table
Not applicable
(f)Compensation of Directors
Directors are not compensated for services on the board. The directors are reimbursed for travel expenses incurred in attending board meetings.
(35)
CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
ITEM 11EXECUTIVE COMPENSATION (CONTINUED)
(g)Employment contracts and termination of employment and change in control arrangements
No employment contracts exist with any executive officers. In addition, there are no contracts currently in place regarding termination of employment or change in control arrangements.
(h)Report on repricing of option/SARs
Not applicable
(i) | Additional information with respect to compensation committee interlocks and insider participation in compensation decisions |
The registrant has no formal compensation committee. The board of directors, Brian A. Yantis and Barry M. Yantis (all current officers of the Company) annually approve the compensation of Barry M. Yantis, CEO, President and Treasurer.
(j)Board compensation committee report on executive compensation
The board bases the annual salary of the CEO on the Company’s prior year performance. The criteria is based upon, but is not limited to, market area expansion, gross profit improvement, control of operating expenses, generation of positive cash flow, and hours devoted to the business during the previous fiscal year.
ITEM 12 | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND STOCKHOLDER MATTERS |
|
|
| Amounts |
|
| ||||
and Nature | |||||||||
of Beneficial | |||||||||
Title of Class | Name and Address | Ownership | % of Class | ||||||
(a) | Security Ownership of Certain Beneficial Owners |
|
|
|
| ||||
| Common; Par Value $1 per Share |
| Barry Yantis, CEO & Director 12 Longleaf Lane, Hilton Head Island, SC 29926 |
| 194,385 | (1) | 16.90 | %(2) | |
|
| Brian Yantis, Officer & Director 1210 E. Clarendon Arlington Heights, IL 60004 | 97,192 | (1) | 8.40 | %(2) | |||
(b) |
| Security Ownership of Management |
|
|
|
|
|
| |
| Common; Par Value $1 per Share |
| Two Directors and CEO as a Group |
| 110,856 |
| 11.40 | % | |
| Prior Cumulative Preferred, $5 Par |
| Two Directors and CEO as a Group |
| 21,533 |
| 21.50 | % | |
| Value: Series A, 6% Convertible | ||||||||
| Prior Cumulative Preferred, $5 Par |
| Two Directors and CEO as a Group |
| 21,533 |
| 21.50 | % | |
| Value: Series B, 6% Convertible | ||||||||
| Cumulative Preferred, $20 Par |
| Two Directors and CEO as a Group |
| 3,017 |
| 5.20 | % | |
| Value: Series A, $5 Convertible | ||||||||
| Cumulative Preferred, $20 Par |
| Two Directors and CEO as a Group |
| 630 |
| 6.60 | % | |
| Value: Series B, $5 Convertible |
(36)
CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
ITEM 12SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND STOCKHOLDER MATTERS (CONTINUED)
| (1) | Includes 120,477 and 60,244 shares, respectively, which could be received within 30 days upon conversion of preferred stock. |
| (2) | Reflects the percentage assuming the preferred shares above were converted into common stock. |
| (c) | No Known Change of Control is Anticipated |
ITEM 13CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
(a)Transactions with management and others
The registrant’s subsidiary, Dye Candy Company entered into an operating lease agreement during the 2005 fiscal year to provide office and manufacturing facilities with a limited liability company that is owned by the son of the Chief Executive Officer of the Company. The annual rent is $78,000.
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.
(b)Certain business relationships
Not applicable
(c)Indebtedness of management
Not applicable
(d)Transactions with promoters
Not applicable
ITEM 14PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table shows the aggregate fees billed to the Company for professional services for the years ended June 30, 2024 and 2023:
| 2024 |
| 2023 | |||
Audit Fees: | ||||||
Mayer Hoffman McCann P.C. (MHM) | $ | — | $ | 15,000 | ||
HoganTaylor LLP | 104,000 | 102,150 | ||||
Audit Related Fees |
| — |
| — | ||
Tax Fees |
| — |
| — | ||
Our Board of Directors pre-approves audit services provided by our independent auditors. The above services and fees were reviewed and approved by the Board before the respective services were rendered.
(37)
CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
PART IV
ITEM 15EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES
The following documents are filed as part of this report.
1. | Consolidated Financial Statements: | Page | |
15 | |||
Report of the Independent Registered Public Accounting Firm (PCAOB ID: 483) | 16 | ||
17-18 | |||
19 | |||
20 | |||
21 | |||
22-31 | |||
2. | Consolidated Financial Statement Schedules: | ||
None | |||
3. | Exhibits: | ||
The exhibits listed below are filed with or incorporated by reference in this report. | |||
The following have been previously filed and are incorporated by reference to prior years’ Forms 10-K filed by the Registrant: | |||
3.1 | |||
3.2 | |||
The following are Exhibits attached or explanations included in “Notes to Consolidated Financial Statements” in Part II of this report: | |||
4. | Instruments defining the rights of security holders including indentures - Refer to Note 4. | ||
11. | |||
21. | Subsidiaries of registrant - Refer to Note 1 of Notes to Consolidated Financial Statements. | ||
31.1 | |||
(38)
CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
32.1 | |||
101 | The following financial statements for the year ended June 30, 2024, formatted in Inline XBRL: (i) Consolidated Balance Sheets as of June 30, 2024 and 2023, (ii) Consolidated Statements of Operations for the years ended June 30, 2024 and 2023, (iii) Consolidated Statement of Stockholders’ Equity for the years ended June 30, 2024 and 2023, (iv) Consolidated Statements of Cash Flows for the years ended June 30, 2024 and 2023, and (v) the Notes to Consolidated Financial Statements, tagged as blocks of text. | ||
104 | Cover Page Interactive Data File (formatted in iXBRL and contained in Exhibit 101) | ||
(39)
CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CHASE GENERAL CORPORATION (Registrant) | |||
Date: | September 20, 2024 | By: | /s/ Barry M. Yantis |
Barry M. Yantis | |||
Chairman of the Board, Chief Executive Officer, | |||
President and Treasurer | |||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated below.
Signatures |
| Title |
| Date |
/s/ Barry M. Yantis | September 20, 2024 | |||
Barry M. Yantis | Chairman of the Board, Chief Executive Officer and Chief Financial Officer, President, Treasurer and Director | |||
/s/ Brian A. Yantis | September 20, 2024 | |||
Brian A. Yantis | Secretary and Director | |||
(40)
EXHIBIT 31.1
CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
CERTIFICATION OF CHIEF EXECUTIVE AND FINANCIAL OFFICER REQUIRED BY RULE 13a-14(a)/15d-14(a)
CERTIFICATION
I Barry Yantis, certify that:
1. | I have reviewed this Annual Report on Form 10-K of Chase General Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; |
3. | Based on my knowledge, the consolidated financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this annual report; |
4. | I am the small business issuer’s certifying officer and am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) ) for Chase General Corporation and we have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to Chase General Corporation, including its consolidated subsidiary, is made known to me by others within that entity, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of Chase General Corporation’s disclosure controls and procedures and presented in this annual report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and |
d) | Disclosed in this report any change in Chase General Corporation’s internal control over financial reporting that occurred during Chase General Corporation’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, Chase General Corporation’s internal control over financial reporting; |
5. | I have disclosed, based on my most recent evaluation of internal control over financial reporting, to Chase General Corporation’s auditors and our board of directors (acting as the audit committee): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting. |
September 20, 2024 |
| /s/ Barry M. Yantis |
Date | | Barry M. Yantis |
| | Chief Executive Officer and Chief Financial Officer, President and Treasurer |
EXHIBIT 32.1
CHASE GENERAL CORPORATION AND SUBSIDIARY
ANNUAL REPORT ON FORM 10-K
FOR THE YEARS ENDED JUNE 30, 2024 AND 2023
CHASE GENERAL CORPORATION
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Chase General Corporation (the Company) on Form 10-K for the year ending June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Barry Yantis, President, Chief Executive Officer, and Treasurer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
September 20, 2024 |
| /s/ Barry M. Yantis |
Date | | Barry M. Yantis |
| | Chairman of the Board, Chief Executive Officer and Chief Financial Officer, President and Treasurer |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) |
Jun. 30, 2024 |
Jun. 30, 2023 |
|---|---|---|
| Allowance for Credit Losses (in dollars) | $ 1,896 | |
| Common stock, par value (in dollars per share) | $ 1 | $ 1 |
| Prior Cumulative Preferred Stock | ||
| Preferred stock, par value (in dollars per share) | $ 5 | $ 5 |
| Prior Cumulative Preferred Stock - Series A | ||
| Preferred stock, liquidation preference (in dollars) | $ 2,490,000 | $ 2,460,000 |
| Prior Cumulative Preferred Stock - Series B | ||
| Preferred stock, liquidation preference (in dollars) | $ 2,445,000 | $ 2,415,000 |
| Cumulative Preferred Stock | ||
| Preferred stock, par value (in dollars per share) | $ 20 | $ 20 |
| Cumulative Preferred Stock - Series A | ||
| Preferred stock, liquidation preference (in dollars) | $ 5,545,994 | $ 5,487,461 |
| Cumulative Preferred Stock - Series B | ||
| Preferred stock, liquidation preference (in dollars) | $ 903,828 | $ 894,289 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) |
12 Months Ended | |
|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||
| SALES | $ 3,395,505 | $ 3,446,234 |
| COST OF SALES | 2,542,003 | 2,361,913 |
| Gross Profit on Sales | 853,502 | 1,084,321 |
| OPERATING EXPENSES | ||
| Selling | 340,816 | 343,734 |
| General and Administrative | 611,312 | 577,224 |
| Total Operating Expenses | 952,128 | 920,958 |
| Income (Loss) from Operations | (98,626) | 163,363 |
| OTHER INCOME (EXPENSE) | ||
| Miscellaneous Income | 1,899 | 1,763 |
| Interest Expense | (14,997) | (7,959) |
| Total Other Income (Expense), net | (13,098) | (6,196) |
| Income (Loss) before Income Taxes | (111,724) | 157,167 |
| INCOME TAX BENEFIT (PROVISION) | ||
| Current tax expense | (1,592) | |
| Deferred tax benefit | 21,239 | |
| Total Income Tax Benefit (Provision) | 19,647 | |
| NET INCOME (LOSS) | $ (92,077) | $ 157,167 |
| EARNINGS (LOSS) PER SHARE | ||
| Basic (in dollars per share) | $ (0.23) | $ 0.03 |
| Diluted (in dollars per share) | $ (0.23) | $ 0.03 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) |
Prior Cumulative Preferred Stock - Series A
Preferred Stock
|
Prior Cumulative Preferred Stock - Series B
Preferred Stock
|
Cumulative Preferred Stock - Series A
Preferred Stock
|
Cumulative Preferred Stock - Series B
Preferred Stock
|
Common Stock |
Paid-In Capital |
Accumulated Deficit |
Total |
|---|---|---|---|---|---|---|---|---|
| BALANCE, Beginning of period at Jun. 30, 2022 | $ 500,000 | $ 500,000 | $ 1,170,660 | $ 190,780 | $ 969,834 | $ 3,134,722 | $ (5,726,735) | $ 739,261 |
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
| Net Income (Loss) | 157,167 | 157,167 | ||||||
| BALANCE, End of period at Jun. 30, 2023 | 500,000 | 500,000 | 1,170,660 | 190,780 | 969,834 | 3,134,722 | (5,569,568) | 896,428 |
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
| Net Income (Loss) | (92,077) | (92,077) | ||||||
| BALANCE, End of period at Jun. 30, 2024 | $ 500,000 | $ 500,000 | $ 1,170,660 | $ 190,780 | $ 969,834 | $ 3,134,722 | $ (5,661,645) | $ 804,351 |
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Nature of Business Chase General Corporation (the Company) was incorporated on November 6, 1944 in the state of Missouri for the purpose of manufacturing confectionery products. The Company grants credit terms to substantially all customers, consisting of repackers, grocery accounts, and national syndicate accounts, who are primarily located in the Midwest region of the United States. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Dye Candy Company. All intercompany transactions and balances have been eliminated in consolidation. Segment Reporting of the Business The subsidiary, Dye Candy Company, operates two divisions, Chase Candy Products and Seasonal Candy Products. Chase Candy Products involve production and sale of a candy bar marketed under the trade name “Cherry Mash”. The Seasonal Candy Products involve production and sale of coconut, peanut, chocolate, and fudge confectioneries. The products of both divisions are sold to the same type of customers in the same geographical areas. In addition, both divisions share a common labor force and utilize the same basic equipment and raw materials. Management considers these two divisions as one reportable segment in these consolidated financial statements. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Shipping and Handling Costs Shipping and handling costs for freight expense on goods shipped are included in cost of sales. Freight expense on goods shipped for the years ended June 30, 2024 and 2023 was $153,116 and $168,442, respectively. Trade Receivables Trade receivables are uncollateralized customer obligations which generally require payment within thirty days from the invoice date. Trade receivables are stated at the invoice amount as no interest is charged to the customer for any past due amounts. Payments of trade receivables are applied to the specific invoices identified on the customer’s remittance advice or, if unspecified, to the earliest unpaid invoices. NOTE 1 NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Trade Receivables (Continued) The carrying amount of trade receivables is reduced by an allowance for credit losses that reflects management’s best estimate of amounts that will not be collected. The Company provides an allowance for credit losses, which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions adjusted for current conditions and reasonable and supportable forecasts. All accounts or portions thereof deemed to be uncollectible, or that require an excessive collection cost, are written off to the allowance for credit losses. Inventories Raw material and packaging material inventories are carried at the “lower of cost or net realizable value,” with cost being determined on the “first-in, first-out” basis of accounting. The cost of goods in process include an estimate for manufacturing overhead. Finished goods inventory are valued using the lower of cost or market value, determined by the retail inventory method. Under the retail inventory method, the valuation of finished goods inventory at cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to the retail value of inventories. Property and Equipment The Company’s property and equipment is recorded at cost and is being depreciated on straight-line method over the following estimated useful lives:
Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceed the fair value of the assets.
NOTE 1 NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Income Taxes Deferred income taxes are provided using the liability method for temporary differences between financial statement and income tax reporting. Temporary differences are differences between the amounts of assets and liabilities reported for financial statement purposes and their tax bases. Deferred income tax assets are recognized for temporary differences that will be deductible in future years’ tax returns and for operating loss and tax credit carryforwards. Deferred income tax assets are only recognized if it is more likely than not that a tax position will be realized or sustained upon examination by the relevant taxing authority. Deferred income tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some or all of the deferred income tax assets will not be realized. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon settlement with a taxing authority that has full knowledge of relevant information. Deferred income tax liabilities are recognized for temporary differences that will be taxable in future years’ tax returns. Deferred income tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the dates of enactment. As of June 30, 2023, the full valuation allowance previously established was removed. The deferred income tax balance as of June 30, 2024 as shown on the accompanying consolidated balance sheet and is expected to be fully utilized. The Company’s policy is to evaluate uncertain tax positions under the guidance as prescribed by ASC 740, Income Taxes. As of June 30, 2024 and 2023, the Company has not identified any uncertain tax positions requiring recognition in the consolidated financial statements. The Company had no accruals for interest or penalties as of June 30, 2024 and 2023. Earnings Per Common Share Basic earnings per common share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per common share shall be computed by including contingently issuable shares with the weighted average shares outstanding during the period. When inclusion of the contingently issuable shares would have an antidilutive effect upon earnings per share, diluted earnings per share will be calculated in the same manner as basic earnings per share. Recently Issued Pronouncements Effective July 1, 2023, the Company adopted ASU 2016-13, Financial Instrument – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments related to the impairment of financial instruments using the modified retrospective approach, which applies Topic 326 at the beginning of the earliest period presented. This guidance, commonly referred to as Current Expected Credit Loss (“CECL”), changes impairment recognition to a model that is based on expected losses rather than incurred losses. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including trade receivables. The Company evaluated and determined the amendment did not have a material affect on the condensed consolidated financial statement. NOTE 1 NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Revenue Recognition The majority of the Company’s 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 sheets 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 add, 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. The adjustments recognized for the year ended June 30, 2024 and 2023 resulting from updated estimates of revenue for prior year product sales were not significant. The Company has elected a practical expedient to recognize incremental costs incurred to obtain contracts, which primarily represent sales commissions where the amortization period would be less than one year, as a selling expense when incurred in the consolidated financial statements. 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. Advertising is expensed when incurred and considered as a component of revenue. Advertising expense was $20,660 and $20,121 for the years ended June 30, 2024 and 2023, respectively. The various divisions of revenue are as follows:
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FORGIVABLE LOAN AND DEFERRED INCOME |
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Jun. 30, 2024 | |
| FORGIVABLE LOAN AND DEFERRED INCOME | |
| FORGIVABLE LOAN AND DEFERRED INCOME | NOTE 2 FORGIVABLE LOAN AND DEFERRED INCOME During 2004, the Company received a $25,000 economic development incentive from Buchanan County, which is a -year forgivable loan at a rate of $5,000 per year. The Nodaway Valley Bank established an Irrevocable Standby Letter of Credit in the amount of $25,000 as collateral for this loan, with a maturity date of January 3, 2010. The Company met the criteria of occupying a 20,000 square foot building and creating a minimum of two new full-time equivalent jobs during the first year of operation in the new facility. In addition, the Company maintained 19 existing jobs during the -year term. Notice was received February 6, 2009 from the Buchanan County Commission, that the Company had fulfilled its minimum loan requirements so that the loan was forgiven in full and has no further obligations. Since the Company was no longer legally required to return the monies, the liability was reclassified as deferred revenue and amortized into income over the life of the lease term of the new facility. Deferred revenue is recognized on a straight line basis over the lease term of 20 years. During the years ended June 30, 2024 and 2023, deferred revenue of $1,299 was amortized into miscellaneous income.
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NOTES PAYABLE |
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| NOTES PAYABLE | NOTE 3 NOTES PAYABLE The Company’s long-term debt at June 30, 2024 and 2023 consists of:
Future minimum payments for the twelve months ending June 30 are:
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CAPITAL STOCK |
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| CAPITAL STOCK | NOTE 4 CAPITAL STOCK Capital stock authorized, issued, and outstanding as of June 30, 2024 is as follows:
Cumulative Preferred Stock dividends in arrears at June 30, 2024 and 2023 totaled $8,973,382 and $8,845,310, respectively. Total dividends in arrears, on a per share basis, consist of the following at June 30, 2024 and 2023:
The 6% convertible prior cumulative preferred stock may, upon 30 days prior notice, be redeemed by the Corporation at $5.25 a share plus unpaid accrued dividends to date of redemption. In the event of voluntary liquidation, holders of this stock are entitled to receive $5.25 per share plus accrued dividends. Cumulative preferred stock may be exchanged for common stock at the option of the shareholders in the ratio of 4 common shares for 1 share of Series A and 3.75 common shares for 1 share of Series B. The Company has the privilege of redemption of 5% convertible cumulative preferred stock at $21.00 a share plus unpaid accrued dividends. In the event of voluntary or involuntary liquidation, holders of this stock are entitled to receive $20.00 a share plus unpaid accrued dividends. It may be exchanged for common stock at the option of the shareholders, in the ratio of 3.795 common shares for 1 of preferred. |
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INCOME TAXES |
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| INCOME TAXES | NOTE 5 INCOME TAXES Management believes the income tax positions taken for open years are appropriately stated and supported for all open years. The Company’s federal tax returns for the years ended June 30, 2023, 2022, and 2021 are subject to examination by the Internal Revenue Service taxing authority. The sources of deferred income tax assets and liabilities at June 30, 2024 and 2023 are as follows:
The income tax provision differs from the amount of income tax determined by applying the statutory federal income tax rate to pretax income (loss) for the years ended June 30, 2024 and 2023 due to the following:
The Company has available at June 30, 2024, $194,767 of net unused operating losses that may be carried forward and applied against future taxable income. These net operating loss carryforwards do not expire but are subject to an 80% of taxable income utilization. |
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EARNINGS (LOSS) PER SHARE |
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| EARNINGS (LOSS) PER SHARE | NOTE 6 EARNINGS (LOSS) PER SHARE The earnings (loss) per share for the years ended June 30, 2024 and 2023, respectively, was computed on the weighted average of outstanding common shares during the year as follows:
Contingently issuable shares were not included in the 2024 or 2023 diluted earnings per common share as they would have an antidilutive effect upon earnings per share. The following table details out the contingently issuable shares for the years ended June 30, 2024 and 2023.
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION |
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| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | NOTE 7 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
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COMMITMENT, CONTINGENCIES, AND RELATED PARTY TRANSACTIONS |
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| COMMITMENT, CONTINGENCIES, AND RELATED PARTY TRANSACTIONS | NOTE 8 COMMITMENTS, 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 owned by the son of the Chief Executive Officer of the Company. The lease term is from February 1, 2005 through March 31, 2025 with an option to extend for an additional term of five years. During the period ended June 30, 2023, the Company determined the exercise of the renewal option is reasonably assured and therefore remeasured the right-of-use asset and lease liability to include the additional five years at the current rate so that the new term expires on March 31, 2030. The lease currently requires payments of $6,500 per month, as noted the Company does not believe the payments in the renewal period will vary significantly from this current amount. Operating lease right-of-use asset and 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 5.75 years and the present value of the lease payments is calculated using the Company’s estimated incremental borrowing rate of 7.6% 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. Additionally, any other short-term leases are immaterial. The Company elected the practical expedient to not separate lease and nonlease components and also elected the short-term practical expedient for all leases that qualify. As a result, the Company will not recognize right-of-use assets or liabilities for short-term leases that qualify for the short-term practical expedient, but instead will recognize the lease payments as lease cost on a straight-line basis over the lease term. Cash paid for the operating lease liability was $71,500 and operating lease expense was $78,000 for the year ended June 30, 2024, of which, $71,565 is included in cost of sales and $6,435 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 June 30, 2024 are as follows:
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. As of June 30, 2024, the Company had raw materials purchase commitments with nine vendors totaling approximately $230,000. |
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DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS |
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Jun. 30, 2024 | |
| DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS | |
| DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 9 DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS The Company’s financial instruments consist principally of cash and cash equivalents, trade receivables and payables, and notes payable. There are no significant differences between the carrying value and fair value of any of these financial instruments. |
CONCENTRATION OF CREDIT RISK |
12 Months Ended |
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Jun. 30, 2024 | |
| CONCENTRATION OF CREDIT RISK | |
| CONCENTRATION OF CREDIT RISK | NOTE 10 CONCENTRATION OF CREDIT RISK For the years ended June 30, 2024 and 2023, two customers accounted for 45% and 48%, respectively , of sales. As of June 30, 2024 and 2023, these same two customers accounted for 43% and 59%, respectively, of trade receivables. |
SUBSEQUENT EVENTS |
12 Months Ended |
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Jun. 30, 2024 | |
| SUBSEQUENT EVENTS | |
| SUBSEQUENT EVENTS | NOTE 11 SUBSEQUENT EVENTS The Company monitors significant events occurring after June 30, 2024 and prior to the issuance of the financial statements to determine the impact, if any, of the events on the consolidated financial statements to be issued. All subsequent events of which the Company is aware were evaluated through the filing date of this Form 10-K. |
Pay vs Performance Disclosure - USD ($) |
12 Months Ended | |
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Jun. 30, 2024 |
Jun. 30, 2023 |
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| Pay vs Performance Disclosure | ||
| Net Income (Loss) | $ (92,077) | $ 157,167 |
Insider Trading Arrangements |
3 Months Ended |
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Jun. 30, 2024 | |
| Trading Arrangements, by Individual | |
| Rule 10b5-1 Arrangement Adopted | false |
| Non-Rule 10b5-1 Arrangement Adopted | false |
| Rule 10b5-1 Arrangement Terminated | false |
| Non-Rule 10b5-1 Arrangement Terminated | false |
SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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| Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Dye Candy Company. All intercompany transactions and balances have been eliminated in consolidation. |
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| Segment Reporting of the Business | Segment Reporting of the Business The subsidiary, Dye Candy Company, operates two divisions, Chase Candy Products and Seasonal Candy Products. Chase Candy Products involve production and sale of a candy bar marketed under the trade name “Cherry Mash”. The Seasonal Candy Products involve production and sale of coconut, peanut, chocolate, and fudge confectioneries. The products of both divisions are sold to the same type of customers in the same geographical areas. In addition, both divisions share a common labor force and utilize the same basic equipment and raw materials. Management considers these two divisions as one reportable segment in these consolidated financial statements. |
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| Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
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| Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. |
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| Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs for freight expense on goods shipped are included in cost of sales. Freight expense on goods shipped for the years ended June 30, 2024 and 2023 was $153,116 and $168,442, respectively. |
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| Trade Receivables | Trade Receivables Trade receivables are uncollateralized customer obligations which generally require payment within thirty days from the invoice date. Trade receivables are stated at the invoice amount as no interest is charged to the customer for any past due amounts. Payments of trade receivables are applied to the specific invoices identified on the customer’s remittance advice or, if unspecified, to the earliest unpaid invoices. Trade Receivables (Continued) The carrying amount of trade receivables is reduced by an allowance for credit losses that reflects management’s best estimate of amounts that will not be collected. The Company provides an allowance for credit losses, which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions adjusted for current conditions and reasonable and supportable forecasts. All accounts or portions thereof deemed to be uncollectible, or that require an excessive collection cost, are written off to the allowance for credit losses. |
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| Inventories | Inventories Raw material and packaging material inventories are carried at the “lower of cost or net realizable value,” with cost being determined on the “first-in, first-out” basis of accounting. The cost of goods in process include an estimate for manufacturing overhead. Finished goods inventory are valued using the lower of cost or market value, determined by the retail inventory method. Under the retail inventory method, the valuation of finished goods inventory at cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to the retail value of inventories. |
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| Property and Equipment | Property and Equipment The Company’s property and equipment is recorded at cost and is being depreciated on straight-line method over the following estimated useful lives:
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| Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceed the fair value of the assets. |
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| Income Taxes | Income Taxes Deferred income taxes are provided using the liability method for temporary differences between financial statement and income tax reporting. Temporary differences are differences between the amounts of assets and liabilities reported for financial statement purposes and their tax bases. Deferred income tax assets are recognized for temporary differences that will be deductible in future years’ tax returns and for operating loss and tax credit carryforwards. Deferred income tax assets are only recognized if it is more likely than not that a tax position will be realized or sustained upon examination by the relevant taxing authority. Deferred income tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some or all of the deferred income tax assets will not be realized. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon settlement with a taxing authority that has full knowledge of relevant information. Deferred income tax liabilities are recognized for temporary differences that will be taxable in future years’ tax returns. Deferred income tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the dates of enactment. As of June 30, 2023, the full valuation allowance previously established was removed. The deferred income tax balance as of June 30, 2024 as shown on the accompanying consolidated balance sheet and is expected to be fully utilized. The Company’s policy is to evaluate uncertain tax positions under the guidance as prescribed by ASC 740, Income Taxes. As of June 30, 2024 and 2023, the Company has not identified any uncertain tax positions requiring recognition in the consolidated financial statements. The Company had no accruals for interest or penalties as of June 30, 2024 and 2023. |
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| Earnings Per Common Share | Earnings Per Common Share Basic earnings per common share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per common share shall be computed by including contingently issuable shares with the weighted average shares outstanding during the period. When inclusion of the contingently issuable shares would have an antidilutive effect upon earnings per share, diluted earnings per share will be calculated in the same manner as basic earnings per share. |
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| Recently Issued Pronouncements | Recently Issued Pronouncements Effective July 1, 2023, the Company adopted ASU 2016-13, Financial Instrument – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments related to the impairment of financial instruments using the modified retrospective approach, which applies Topic 326 at the beginning of the earliest period presented. This guidance, commonly referred to as Current Expected Credit Loss (“CECL”), changes impairment recognition to a model that is based on expected losses rather than incurred losses. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including trade receivables. The Company evaluated and determined the amendment did not have a material affect on the condensed consolidated financial statement. |
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| Revenue Recognition | Revenue Recognition The majority of the Company’s 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 sheets 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 add, 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. The adjustments recognized for the year ended June 30, 2024 and 2023 resulting from updated estimates of revenue for prior year product sales were not significant. The Company has elected a practical expedient to recognize incremental costs incurred to obtain contracts, which primarily represent sales commissions where the amortization period would be less than one year, as a selling expense when incurred in the consolidated financial statements. 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. Advertising is expensed when incurred and considered as a component of revenue. Advertising expense was $20,660 and $20,121 for the years ended June 30, 2024 and 2023, respectively. The various divisions of revenue are as follows:
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NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||
| NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||||||||||||||||||||||||||||
| Schedule of property plant and equipment depreciated over the estimated useful life |
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| Schedule of divisions of revenue |
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NOTES PAYABLE (Tables) |
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Schedule of long-term debt |
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| Schedule of future minimum payments of long term debt |
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CAPITAL STOCK (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CAPITAL STOCK | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of capital stock authorized, issued, and outstanding |
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| Schedule of preferred stock dividends in arrears on a per share basis |
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INCOME TAX (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INCOME TAXES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of sources of deferred tax assets and liability |
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| Schedule of effective income tax rate reconciliation |
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EARNINGS (LOSS) PER SHARE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| EARNINGS (LOSS) PER SHARE | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of earnings (loss) per share computed on the weighted average of outstanding common shares |
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| Schedule of antidilutive shares excluded from computation of earnings per share |
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of supplemental disclosures of cash flow information |
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COMMITMENT, CONTINGENCIES, AND RELATED PARTY TRANSACTIONS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||
| COMMITMENT, CONTINGENCIES, AND RELATED PARTY TRANSACTIONS | |||||||||||||||||||||||||||||||||||||||||||||
| Schedule of annual payments |
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NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) |
12 Months Ended | |
|---|---|---|
|
Jun. 30, 2024
USD ($)
segment
division
|
Jun. 30, 2023
USD ($)
|
|
| NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | ||
| Number of product divisions | division | 2 | |
| Number of reportable segments | segment | 1 | |
| Cost of sales | $ 2,542,003 | $ 2,361,913 |
| Trade receivable payment term | 30 days | |
| Accruals for interest or penalties | $ 0 | 0 |
| Revenue, Practical Expedient, Incremental Cost of Obtaining Contract [true false] | true | |
| Advertising expense | $ 20,660 | 20,121 |
| Freight expenses | ||
| NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | ||
| Cost of sales | $ 153,116 | $ 168,442 |
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - Estimated useful lives (Details) |
Jun. 30, 2024 |
|---|---|
| Buildings | |
| NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | |
| Estimated useful lives | 39 years |
| Machinery and equipment | Maximum | |
| NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | |
| Estimated useful lives | 7 years |
| Machinery and equipment | Minimum | |
| NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | |
| Estimated useful lives | 5 years |
| Trucks and autos | |
| NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | |
| Estimated useful lives | 5 years |
| Office equipment | Maximum | |
| NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | |
| Estimated useful lives | 7 years |
| Office equipment | Minimum | |
| NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | |
| Estimated useful lives | 5 years |
| Leasehold improvements | |
| NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | |
| Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration] | us-gaap:UsefulLifeShorterOfTermOfLeaseOrAssetUtilityMember |
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - Divisions of Revenue (Details) - USD ($) |
12 Months Ended | |
|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Revenue | $ 3,395,505 | $ 3,446,234 |
| SALES - Chase Candy | ||
| Revenue | 1,882,291 | 1,956,658 |
| SALES - Seasonal Candy | ||
| Revenue | $ 1,513,214 | $ 1,489,576 |
FORGIVABLE LOAN AND DEFERRED INCOME (Details) |
12 Months Ended | ||
|---|---|---|---|
|
Jun. 30, 2024
USD ($)
|
Jun. 30, 2023
USD ($)
|
Jun. 30, 2004
USD ($)
ft²
item
|
|
| FORGIVABLE LOAN AND DEFERRED INCOME | |||
| Lease term of deferred revenue | 20 years | ||
| Amortized deferred revenue into miscellaneous income | $ 1,299 | $ 1,299 | |
| Nodaway Valley Bank | Standby Letters of Credit | |||
| FORGIVABLE LOAN AND DEFERRED INCOME | |||
| Economic development incentive, forgivable loan | $ 25,000 | ||
| Term of forgivable loan | 5 years | ||
| Loan rate per year | $ 5,000 | ||
| Letter of credit, collateral amount | $ 25,000 | ||
| Area of land occupying | ft² | 20,000 | ||
| Number of existing jobs maintained | item | 19 | ||
| Term of existing jobs maintenance | 5 years | ||
NOTES PAYABLE - Debt Minimum Payments (Details) |
Jun. 30, 2024
USD ($)
|
|---|---|
| NOTES PAYABLE | |
| 2025 | $ 161,688 |
| 2026 | 22,741 |
| 2027 | 14,129 |
| Total | $ 198,558 |
CAPITAL STOCK - Shares authorized, issued, and outstanding (Details) |
Jun. 30, 2024
shares
|
|---|---|
| CAPITAL STOCK | |
| Common stock- reserved for conversion of preferred shares authorized | 2,000,000 |
| Common stock- reserved for conversion of preferred shares issued | 969,834 |
| Common stock- reserved for conversion of preferred shares outstanding | 969,834 |
| Prior Cumulative Preferred Stock | |
| CAPITAL STOCK | |
| Preferred shares authorized | 240,000 |
| Prior Cumulative Preferred Stock - Series A | |
| CAPITAL STOCK | |
| Preferred shares issued | 100,000 |
| Preferred shares outstanding | 100,000 |
| Prior Cumulative Preferred Stock - Series B | |
| CAPITAL STOCK | |
| Preferred shares issued | 100,000 |
| Preferred shares outstanding | 100,000 |
| Cumulative Preferred Stock | |
| CAPITAL STOCK | |
| Preferred shares authorized | 150,000 |
| Cumulative Preferred Stock - Series A | |
| CAPITAL STOCK | |
| Preferred shares issued | 58,533 |
| Preferred shares outstanding | 58,533 |
| Cumulative Preferred Stock - Series B | |
| CAPITAL STOCK | |
| Preferred shares issued | 9,539 |
| Preferred shares outstanding | 9,539 |
CAPITAL STOCK - Shares authorized, issued, and outstanding (Parenthetical) (Details) - $ / shares |
12 Months Ended | |
|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| CAPITAL STOCK | ||
| Common stock, par value (in dollars per share) | $ 1 | $ 1 |
| Reserved for conversion of preferred stock (in shares) | 1,030,166 | |
| Prior Cumulative Preferred Stock | ||
| CAPITAL STOCK | ||
| Preferred stock, par value (in dollars per share) | $ 5 | $ 5 |
| Stated percentage of preferred stock | 6.00% | 6.00% |
| Cumulative Preferred Stock | ||
| CAPITAL STOCK | ||
| Preferred stock, par value (in dollars per share) | $ 20 | $ 20 |
| Stated percentage of preferred stock | 5.00% | 5.00% |
CAPITAL STOCK - Preferred Stock dividends in arrears on a per share basis (Details) - $ / shares |
Jun. 30, 2024 |
Jun. 30, 2023 |
|---|---|---|
| Prior Cumulative Preferred Stock - Series A | ||
| CAPITAL STOCK | ||
| Cumulative preferred stock dividends in arrears | $ 20 | $ 19 |
| Prior Cumulative Preferred Stock - Series B | ||
| CAPITAL STOCK | ||
| Cumulative preferred stock dividends in arrears | 19 | 19 |
| Cumulative Preferred Stock - Series A | ||
| CAPITAL STOCK | ||
| Cumulative preferred stock dividends in arrears | 75 | 74 |
| Cumulative Preferred Stock - Series B | ||
| CAPITAL STOCK | ||
| Cumulative preferred stock dividends in arrears | $ 75 | $ 74 |
INCOME TAXES - Sources of deferred tax assets and liability (Details) - USD ($) |
12 Months Ended | |
|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2024 |
|
| Deferred tax assets: | ||
| Allowance for Credit Losses | $ 500 | $ 500 |
| Deferred Income | 500 | 235 |
| Contribution Carryover | 2,329 | |
| Other | 6,000 | |
| Net operating loss carryforwards | 20,600 | 47,014 |
| Deferred tax assets | 27,600 | 50,078 |
| Deferred tax liabilities: | ||
| Book/Tax Difference on Property and Equipment | (27,600) | (28,839) |
| Deferred tax liabilities | (27,600) | (28,839) |
| Net deferred tax asset before valuation allowance | 21,239 | |
| Valuation allowance: | ||
| Beginning balance | (30,500) | |
| Decrease/(Increase) during the period | $ 30,500 | |
| Net deferred tax asset | $ 21,239 |
INCOME TAXES - Effective income tax rate reconciliation (Details) - USD ($) |
12 Months Ended | |
|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| INCOME TAXES | ||
| Computed at statutory rate | $ (23,462) | $ 33,005 |
| Increase (decrease) resulting from: | ||
| State income taxes - net of federal tax benefit | (2,588) | 4,966 |
| Change in deferred tax asset valuation allowance | (30,500) | |
| Other | 6,403 | $ (7,471) |
| Actual tax (benefit) provision | $ (19,647) | |
INCOME TAXES - Additional Information (Details) |
Jun. 30, 2024
USD ($)
|
|---|---|
| INCOME TAXES | |
| Operating loss carryforwards | $ 194,767 |
EARNINGS (LOSS) PER SHARE (Details) - USD ($) |
12 Months Ended | |
|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| EARNINGS (LOSS) PER SHARE | ||
| Net Income (Loss) | $ (92,077) | $ 157,167 |
| Preferred Dividend Requirements: | ||
| Total Dividend Requirements | 128,072 | 128,072 |
| Net Income (Loss) attributable to Common Stockholders | $ (220,149) | $ 29,095 |
| Weighted Average Shares - Basic (in shares) | 969,834 | 969,834 |
| Dilutive Effect of Contingently Issuable Shares | 1,033,334 | 1,033,334 |
| Weighted Average Shares - Diluted (in shares) | 2,003,168 | 2,003,168 |
| Basic Earnings (Loss) per Share (in $ per share) | $ (0.23) | $ 0.03 |
| Diluted Earnings (Loss) per Share (in $ per share) | $ (0.23) | $ 0.03 |
| 6% Prior Cumulative Preferred, $5 par value | ||
| Preferred Dividend Requirements: | ||
| Total Dividend Requirements | $ 60,000 | $ 60,000 |
| 5% Convertible Cumulative Preferred, $20 Par Value | ||
| Preferred Dividend Requirements: | ||
| Total Dividend Requirements | $ 68,072 | $ 68,072 |
EARNINGS (LOSS) PER SHARE (Parenthetical) (Details) - $ / shares |
12 Months Ended | |
|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| 6% Prior Cumulative Preferred, $5 par value | ||
| EARNINGS (LOSS) PER SHARE | ||
| Stated percentage of preferred stock | 6.00% | 6.00% |
| Preferred stock, par value (in dollars per share) | $ 5 | $ 5 |
| 5% Convertible Cumulative Preferred, $20 Par Value | ||
| EARNINGS (LOSS) PER SHARE | ||
| Stated percentage of preferred stock | 5.00% | 5.00% |
| Preferred stock, par value (in dollars per share) | $ 20 | $ 20 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION (Details) - USD ($) |
12 Months Ended | |
|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Supplemental Cash Flow Information: | ||
| Interest paid | $ 14,915 | $ 7,681 |
| Right-of-use asset obtained in exchange for modification of operating lease liability | 279,072 | |
| Proceeds received on trade-in of vehicle | $ 24,000 | |
| Note Payable obligation incurred for vehicle | $ 50,900 | |
COMMITMENT, CONTINGENCIES, AND RELATED PARTY TRANSACTIONS - Future minimum lease payments (Details) |
Jun. 30, 2024
USD ($)
|
|---|---|
| COMMITMENT, CONTINGENCIES, AND RELATED PARTY TRANSACTIONS | |
| 2025 | $ 78,000 |
| 2026 | 78,000 |
| 2027 | 78,000 |
| 2028 | 78,000 |
| 2029 | 78,000 |
| Thereafter | 65,000 |
| Total Lease Payments | 455,000 |
| Less: Imputed Interest | 89,628 |
| Total Lease Liability | $ 365,372 |
CONCENTRATION OF CREDIT RISK (Details) - Customer concentration risk - Customer [Member] - customer |
12 Months Ended | |
|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Gross sales | ||
| CONCENTRATION OF CREDIT RISK | ||
| Number of customers accounted credit risk | 2 | 2 |
| Customer concentration risk, percentage | 45.00% | 48.00% |
| Trade receivables | ||
| CONCENTRATION OF CREDIT RISK | ||
| Number of customers accounted credit risk | 2 | 2 |
| Customer concentration risk, percentage | 43.00% | 59.00% |
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