10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended December 31, 2014

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

For the transition period from     to

Commission File Number 2-5916

Chase General Corporation

(Exact name of small business issuer as specified in its charter)

MISSOURI	36-2667734
(State or other jurisdiction of	(IRS Employer Identification No.)
incorporation or organization)

1307 South 59th, St. Joseph, Missouri 64507

(Address of principal executive offices, Zip Code)

	(816) 279-1625
(Issuer’s telephone number, including area code)

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

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

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

Large accelerated filer  ☐	Accelerated filer  ☐
Non-accelerated filer  ☐  (Do not check if a smaller reporting company)	Smaller reporting company  ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934)  Yes  ☐     No  ☒

As of February 12, 2015, there were 969,834 shares of common stock, $1.00 par value, outstanding.

CHASE GENERAL CORPORATION AND SUBSIDIARY
Quarterly Report on Form 10-Q
For the Three Months Ended December 31, 2014

TABLE OF CONTENTS

PART I  FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements	3
	Condensed Consolidated Balance Sheets as of December 31, 2014 (Unaudited) and June 30, 2014	3
	Condensed Consolidated Statements of Income for the Three Months Ended December 31, 2014 and 2013 (Unaudited)	5
	Condensed Consolidated Statements of Income for the Six Months Ended December 31, 2014 and 2013 (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2014 and 2013 (Unaudited)	7
	Notes to Condensed Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	21
PART II  OTHER INFORMATION
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3.	Defaults Upon Senior Securities	22
Item 4.	Mine Safety Disclosures	22
Item 5.	Other Information	22
Item 6.	Exhibits	23
Signatures		24

2

PART I.  FINANCIAL INFORMATION

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CHASE GENERAL CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS
	December 31,		June 30,
	2014		2014
	(Unaudited)
CURRENT ASSETS
Cash and cash equivalents	$	452,930	$	162,435
Trade receivables, net of allowance for doubtful accounts of $17,858 and $16,508, respectively		268,933		178,686
Inventories:
Finished goods		58,389		258,726
Goods in process		15,108		11,950
Raw materials		70,826		80,088
Packaging materials		106,760		145,046
Prepaid expenses		34,621		12,233
Deferred income taxes		6,991		7,047
Total current assets		1,014,558		856,211
PROPERTY AND EQUIPMENT
Land		35,000		35,000
Buildings		77,348		77,348
Machinery and equipment		753,837		739,962
Trucks and autos		196,982		188,594
Office equipment		31,518		31,518
Leasehold improvements		72,068		72,068
Total		1,166,753		1,144,490
Less accumulated depreciation		839,352		841,445
Total property and equipment, net		327,401		303,045
TOTAL ASSETS	$	1,341,959	$	1,159,256

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

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CHASE GENERAL CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

LIABILITIES AND STOCKHOLDERS’ EQUITY
	December 31,			June 30,
	2014			2014
	(Unaudited)
CURRENT LIABILITIES
Accounts payable	$	104,898		$	51,947
Current maturities of notes payable		10,832			21,537
Accrued expenses		15,072			139,098
Income taxes payable		99,925			21,203
Deferred income		1,299			1,299
Total current liabilities		232,026			235,084
LONG-TERM LIABILITIES
Deferred income		12,012			12,661
Notes payable, less current maturities		18,146			4,650
Deferred income taxes		74,850			79,176
Total long-term liabilities		105,008			96,487
Total liabilities		337,034			331,571
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Capital stock issued and outstanding:
Prior cumulative preferred stock, $5 par value:
Series A (liquidation preference $2,205,000 and $2,190,000, respectively)		500,000			500,000
Series B (liquidation preference $2,160,000 and $2,145,000, respectively)		500,000			500,000
Cumulative preferred stock, $20 par value
Series A (liquidation preference $4,989,931 and $4,960,664, respectively)		1,170,660			1,170,660
Series B (liquidation preference $813,207 and $808,438, respectively)		190,780			190,780
Common stock, $1 par value		969,834			969,834
Paid-in capital in excess of par		3,134,722			3,134,722
Accumulated deficit		(5,461,071	)		(5,638,311	)
Total stockholders’ equity		1,004,925			827,685
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,341,959		$	1,159,256

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

4

CHASE GENERAL CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended
	December 31
	2014			2013
NET SALES	$	1,291,273		$	1,402,545
COST OF SALES		846,057			938,247
Gross profit on sales		445,216			464,298
OPERATING EXPENSES
Selling		149,763			161,115
General and administrative		90,453			95,111
Loss (gain) on sale of equipment		(15,912	)		93
Total operating expenses		224,304			256,319
Income from operations		220,912			207,979
OTHER INCOME (EXPENSE)
Miscellaneous income		422			1,972
Interest expense		(1,069	)		(555	)
Total other income (expense), net		(647	)		1,417
Net income before income taxes		220,265			209,396
PROVISION FOR INCOME TAXES		77,726			73,564
NET INCOME	$	142,539		$	135,832
NET INCOME PER SHARE OF COMMON STOCK
- BASIC	$	0.11		$	0.11
- DILUTED	$	0.06		$	0.05

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

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CHASE GENERAL CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Six Months Ended
	December 31
	2014			2013
NET SALES	$	2,283,181		$	2,313,805
COST OF SALES		1,561,127			1,596,601
Gross profit on sales		722,054			717,204
OPERATING EXPENSES
Selling		264,404			258,037
General and administrative		211,834			233,501
Loss (gain) on sale of equipment		(15,912	)		93
Total operating expenses		460,326			491,631
Income from operations		261,728			225,573
OTHER INCOME (EXPENSE)
Miscellaneous income		12,444			2,336
Interest expense		(1,956	)		(3,141	)
Total other income (expense), net		10,488			(805	)
Net income before income taxes		272,216			224,768
PROVISION FOR INCOME TAXES		94,976			77,799
NET INCOME	$	177,240		$	146,969
NET INCOME PER SHARE OF COMMON STOCK
- BASIC	$	0.12		$	0.09
- DILUTED	$	0.06		$	0.04

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

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CHASE GENERAL CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended
	December 31
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	177,240		$	146,969
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		50,127			43,294
Allowance for bad debts		1,350			600
Deferred income amortization		(649	)		(649	)
Deferred income taxes		(4,270	)		(10,519	)
Loss (gain) on sale of equipment		(15,912	)		93
Effects of changes in operating assets and liabilities:
Trade receivables		(91,597	)		(76,808	)
Inventories		244,727			268,049
Prepaid expenses		(22,388	)		(21,010	)
Accounts payable		49,484			43,068
Accrued expenses		(124,026	)		(11,603	)
Income taxes payable		78,722			84,135
Net cash provided by operating activities		342,808			465,619
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment		(33,876	)		(21,132	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from line-of-credit		265,000			290,000
Principal payments on line-of-credit		(265,000	)		(290,000	)
Principal payments on notes payable		(18,437	)		(34,403	)
Net cash used in financing activities		(18,437	)		(34,403	)
NET INCREASE IN CASH AND CASH EQUIVALENTS		290,495			410,084
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		162,435			28,564
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	452,930		$	438,648

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

7

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - GENERAL

The condensed consolidated balance sheet of Chase General Corporation (hereinafter referred to as “Chase”, “we”, “our”, and “us”) at June 30, 2014 has been taken from audited consolidated financial statements at that date and condensed.  The condensed consolidated financial statements as of and for the three and six months ended December 31, 2014 and for the three and six months ended December 31, 2013 are unaudited and reflect all normal and recurring accruals and adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position, operating results and cash flows for the interim periods presented in this quarterly report.  The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, together with management’s discussion and analysis of financial condition and results of operations, contained in our Annual Report on Form 10-K for the year ended June 30, 2014.  The results of operations for the three and six months ended December 31, 2014 and cash flows for the six months ended December 31, 2014 are not necessarily indicative of the results for the entire fiscal year ending June 30, 2015.  In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to fairly present financial position, results of operations and cash flows for the periods have been included.

No events have occurred subsequent to December 31, 2014, through the date of filing this form, that would require disclosure in this Form 10-Q or would be required to be recognized in the condensed consolidated financial statements as of or for the six month period ended December 31, 2014.

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CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2 - EARNINGS PER SHARE

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

	Three Months Ended				Six Months Ended
	December 31				December 31
	2014		2013		2014		2013
Net income	$	142,539	$	135,832	$	177,240	$	146,969
Preferred dividend requirements:
6% Prior Cumulative Preferred, $5 par value		15,000		15,000		30,000		30,000
5% Convertible Cumulative Preferred, $20 par value		17,018		17,018		34,036		34,036
Total dividend requirements		32,018		32,018		64,036		64,036
Net income - common stockholders	$	110,521	$	103,814	$	113,204	$	82,933
Weighted average shares - basic		969,834		969,834		969,834		969,834
Dilutive effect of contingently issuable shares		1,033,334		1,033,334		1,033,334		1,033,334
Weighted average shares - diluted		2,003,168		2,003,168		2,003,168		2,003,168
Basic earnings per share	$	0.11	$	0.11	$	0.12	$	0.09
Diluted earnings per share	$	0.06	$	0.05	$	0.06	$	0.04

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CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2 - EARNINGS PER SHARE (CONTINUED)

Cumulative Preferred Stock dividends in arrears at December 31, 2014 and 2013 totaled $7,756,698 and $7,628,626, respectively.  Total dividends in arrears, on a per share basis, consist of the following:

	Six Months Ended
	December 31
	2014		2013
6% Convertible
Series A	$	17	$	17
Series B	$	16	$	16
5% Convertible
Series A	$	65	$	64
Series B	$	65	$	64

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

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

10

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 - NOTES PAYABLE

The Company’s long-term debt consists of:

		December 31,		June 30,
Payee	Terms	2014		2014
Nodaway Valley Bank	$350,000 line-of-credit agreement expiring on January 3, 2016, with a variable interest rate at prime but not less than 5%. The line-of-credit is collateralized by substantially all assets of the Company.	$	-	$	-
Ford Credit	$468 monthly payments, interest of 2.9%; final payment due January 2019, secured by a vehicle.		21,228		-
Ford Credit	$517 monthly payments, interest of 0%; final payment due March 2016, secured by a vehicle.		7,750		10,850
Nodaway Valley Bank	$3,192, including interest of 5.75%; final payment due June 2015, secured by equipment; paid in full in December 2014.		-		12,547
Toyota Financial Services	$305 monthly payments including interest of 2.9% due March 2015, secured by a vehicle; paid in full in December 2014.		-		2,790
	Total		28,978		26,187
	Less current portion		10,832		21,537
	Long-term portion	$	18,146	$	4,650

Upon expiration of the line-of-credit agreement on January 3, 2015, the Company entered into a $350,000 line-of-credit agreement that expires on January 3, 2016 with a variable interest rate at prime but not less than 5%.  The line-of-credit is collateralized by substantially all assets of the Company.  Management anticipates renewal of the line-of-credit agreement at similar terms upon expiration.

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CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 - NOTES PAYABLE (CONTINUED)

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

2015	$	10,832
2016		6,772
2017		5,375
2018		5,533
2019		466
Total	$	28,978

NOTE 4 - INCOME TAXES

The Company follows the provisions for uncertain tax positions as addressed in Financial Accounting Standards Board Accounting Standards Codification 740-10.  The Company recognized no liability for unrecognized tax benefits at December 31, 2014.  The Company has no material tax positions at December 31, 2014 for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of such deductibility.  The Company had no accruals for interest or penalties at December 31, 2014.  The Company’s federal income tax returns for the fiscal years ended 2012, 2013 and 2014 are subject to examination by the IRS taxing authority.

NOTE 5 - SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

	Six Months Ended
	December 31
	2014		2013
Cash paid for:
Interest	$	1,956	$	3,141
Income taxes		28,504		4,105
Non-cash transactions:
Financing of new vehicle		21,228		-
Sales tax on new vehicle in accounts payable		3,467		-

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CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 6 – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In May 2014, the Financial Accounting Standards Board issued new accounting guidance for the recognition of revenue from contracts with customers, which will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective.  The new standard is effective for the Company’s fiscal year 2018, and early adoption is not permitted.  The Company is evaluating the effect the new guidance will have on its consolidated financial statements and related disclosures.  The Company has not yet determined the effect of the standard on its ongoing financial reporting.

There have been no other newly issued or newly applicable accounting pronouncements that have, or are expected to have, a significant impact on the Company’s financial statements.

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CHASE GENERAL CORPORATION AND SUBSIDIARY

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	OVERVIEW
	Chase General Corporation (Chase) is a holding company for its wholly-owned subsidiary, Dye Candy Company.  This subsidiary is the main operating company that is engaged in the manufacture of confectionery products which are sold primarily to wholesale houses, grocery accounts, vendors, and repackers.  The subsidiary (Company) operates two divisions, Chase Candy division and Seasonal Candy division, which share a common labor force and utilize the same basic equipment and raw materials.  Therefore, segment reporting for the two divisions is not maintained by Management.
	The Company’s business, like that of many other confectionary product manufacturers, is seasonal.  Historically, the Company has realized more of its revenue and earnings in the fiscal second quarter, which includes the majority of the holiday shopping season, than in any other fiscal quarter.
	RESULTS OF OPERATIONS - Three Months Ended December 31, 2014 Compared to Three Months Ended December 31, 2013, and Six Months Ended December 31, 2014 Compared to Six Months Ended December 31, 2013
	The following management comments regarding Chase’s results of operations and outlook should be read in conjunction with the condensed consolidated financial statements included pursuant to Item 1 of the quarterly report.
	The following table sets forth certain items as a percentage of net sales and revenues for the periods presented:

	Three Months Ended						Six Months Ended
	December 31						December 31
	2014			2013			2014			2013
Net sales		100	%		100	%		100	%		100	%
Cost of sales		66			67			68			69
Gross profit on sales		34			33			32			31
Operating expenses		17			18			20			21
Income from operations		17			15			12			10
Other income (expense), net		-			1			-			-
Income before income taxes		17			16			12			10
Provision for income taxes		6			5			4			3
Net income		11	%		11	%		8	%		7	%

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CHASE GENERAL CORPORATION AND SUBSIDIARY

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
	NET SALES
	Net sales decreased $111,272 or 8% for the three months ended December 31, 2014 to $1,291,273 compared to $1,402,545 for the three months ended December 31, 2013.  Gross sales for Chase Candy decreased $10,569 to $546,728 for the three months ended December 31, 2014, compared to $557,297 for the three months ended December 31, 2013.  Gross sales for Seasonal Candy decreased $90,077 to $757,403 for the three months ended December 31, 2014, compared to $847,480 for the three months ended December 31, 2013.
	The 11% decrease in gross sales of Seasonal Candy of $90,077 for the three months ended December 31, 2014 over the same period ended December 31, 2013, is primarily due to the net effect of the following:  1) decreased sales in the clamshell seasonal division by approximately $64,000 versus the same period a year ago primarily due to the timing of orders from three customers; 2) decreased sales in the bulk seasonal division by approximately $54,000 versus the same period a year ago primarily due to the timing of orders from three customers and decreased orders from one customer; offset by 3) increased sales in the generic seasonal product division by approximately $28,000 due to increased orders from one customer along with the introduction of new packaging.
	The 2% decrease in gross sales of Chase Candy of $10,569 for the three months ended December 31, 2014 over the same period ended December 31, 2013, is primarily due to the net effect of the following:  1) decreased sales of the L276 Cherry Mash Distributor Pack division by approximately $34,000 versus the same period a year ago primarily due to one customer decreasing orders; 2) decreased sales of the L279/L299 Bulk Mini Mash division by approximately $16,000 versus the same period a year ago primarily due to the timing of orders from one customer and to one customer decreasing orders; 3) various other fluctuations netting to a decrease of approximately $3,000; 4) decreased sales of the L260 Changemaker Jar division by approximately $1,000 versus the same period a year ago primarily due to one customer decreasing orders; offset by 5) increased sales of the L278/L212 Mini Mash division by approximately $27,000 versus the same period a year ago primarily due to four customers increasing orders; and 6) increased sales of the Cherry Mash Merchandiser division by approximately $16,000 versus the same period a year ago primarily due to four customers increasing orders.
	Net sales decreased $30,624 or 1% for the six months ended December 31, 2014 to $2,283,181 compared to $2,313,805 for the six months ended December 31, 2013.  Gross sales for Chase Candy decreased $26,586 to $1,038,808 for the six months ended December 31, 2014, compared to $1,065,394 for the three months ended December 31, 2013.  Gross sales for Seasonal Candy increased $1,820 to $1,265,027 for the six months ended December 31, 2014, compared to $1,263,207 for the three months ended December 31, 2013.

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CHASE GENERAL CORPORATION AND SUBSIDIARY

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
	NET SALES  (CONTINUED)
	The 3% decrease in gross sales of Chase Candy of $26,586 for the six months ended December 31, 2014 over the same period ended December 31, 2013, is primarily due to the net effect of the following:  1) decreased sales of the L276 Cherry Mash Distributor Pack division by approximately $75,000 versus the same period a year ago primarily due to one customer decreasing orders; 2) decreased sales of the L279/L299 Bulk Mini Mash division by approximately $15,000 versus the same period a year ago primarily due to two customers decreasing orders; 3) various other fluctuations netting to a decrease of approximately $2,000; 4) decreased sales of the L260 Changemaker Jar division by approximately $1,000 versus the same period a year ago primarily due to one customer decreasing orders; offset by 5) increased sales of the L278/L212 Mini Mash division by approximately $51,000 versus the same period a year ago primarily due to two customers increasing orders; and 6) increased sales of the Cherry Mash Merchandiser division by approximately $16,000 versus the same period a year ago primarily due to four customers increasing orders.
	The slight increase in gross sales of Seasonal Candy of $1,820 for the six months ended December 31, 2014 over the same period ended December 31, 2013, is primarily due to the net effect of the following:  1) increased sales in the generic seasonal product division by approximately $17,000 due to increased orders from one customer along with the introduction of new packaging; 2) increased sales in the clamshell seasonal division by approximately $7,000 versus the same period a year ago primarily due to increased orders from one customer; offset by 3) decreased sales in the bulk seasonal division by approximately $22,000 versus the same period a year ago primarily due to decreased orders from three customers.
	COST OF SALES
	The cost of sales decreased $92,190 to $846,057 or 66% of related revenues for the three months ended December 31, 2014, compared to $938,247 or 67% of related revenues for the three months ended December 31, 2013.
	The 10% decrease in cost of sales of $92,190 is primarily due to the 8% decrease in net sales of $111,272 and a 5% decrease in price of peanuts.
	The cost of sales decreased $35,474 to $1,561,127 or 68% of related revenues for the six months ended December 31, 2014, compared to $1,596,601 or 69% of related revenues for the six months ended December 31, 2013.

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CHASE GENERAL CORPORATION AND SUBSIDIARY

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
	COST OF SALES (CONTINUED)
	The 2% decrease in cost of sales of $35,474 is primarily due to the 1% decrease in net sales of $30,624 and a 5% decrease in the price of peanuts.  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.
	SELLING EXPENSES
	Selling expenses for the three months ended December 31, 2014 decreased $11,352 to $149,763, which is 12% of sales, compared to $161,115, or 11% of sales for the three months ended December 31, 2013.
	The decrease of $11,352 in selling expenses for the three months ended December 31, 2014 is primarily due to lower premium promotions expense and lower commissions expense offset by higher depreciation expense. Premium promotions, which are paid to customers for various marketing reasons, decreased $9,861 to $36,833 for this period from $46,694 for the three months ended December 31, 2013. Commissions expense, which are based on sales, decreased $3,842 to $42,019 for this period from $45,861 for the three months ended December 31, 2013. Depreciation expense increased $3,532 to $11,908 for this period from $8,376 primarily due to the purchases of property and equipment of $28,767 during the year ended June 30, 2014 combined with the acquisition of a vehicle in December 2014.
	Selling expenses for the six months ended December 31, 2014 increased $6,367 to $264,404, which is 12% of sales, compared to $258,037 or 11% of sales for the six months ended December 31, 2013.
	The increase of $6,367 in selling expenses for the six months ended December 31, 2014 is primarily due to higher depreciation expense for the period.  Depreciation expense increased $4,795 to $21,546 for this period from $16,751 primarily due to the purchases of property and equipment of $28,767 during the year ended June 30, 2014 combined with the acquisition of a vehicle in December 2014.

17

CHASE GENERAL CORPORATION AND SUBSIDIARY

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
	GENERAL AND ADMINISTRATIVE EXPENSES
	General and administrative expenses for the three months ended December 31, 2014 decreased $4,658 to $90,453 and 7% of sales, compared to $95,111 or 7% of sales for the three months ended December 31, 2013.  The decreased costs are primarily because of a $3,688 decrease in insurance expense.
	General and administrative expenses for the six months ended December 31, 2014 decreased $21,667 to $211,834 or 9% of sales, compared to $233,501 or 10% of sales for the six months ended December 31, 2013.  The decreased costs are primarily because of an $18,436 decrease in professional fees and a $6,317 decrease in insurance expense.
	OTHER INCOME (EXPENSE)
	Other income (expense) decreased by $2,064 for the three months ended December 31, 2014 to $(647), compared to $1,417 for the three months ended December 31, 2013 primarily due to a increase of $514 in interest expense and an decrease of $1,550 in miscellaneous income.
	Other income (expense) increased by $11,293 for the six months ended December 31, 2014 to $10,488, compared to $(805) for the six months ended December 31, 2013 primarily due to a decrease of $1,185 in interest expense, a freight claim of approximately $4,000 and a refund of approximately $7,000 from a customer related to an underpayment written off during the year ending June 30, 2014.
	PROVISION FOR INCOME TAXES
	The Company recorded income tax expense for the three months ended December 31, 2014 of $77,726 as compared to income tax expense of $73,564 for the three months ended December 31, 2013.  The Company recorded income tax expense for the six months ended December 31, 2014 of $94,976 as compared to income tax expense of $77,799 for the six months ended December 31, 2013.  The net income tax expense recorded for the three and six months ended December 31, 2014 is primarily due to recognizing income taxes related to current profitable operations.

18

CHASE GENERAL CORPORATION AND SUBSIDIARY

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

NET INCOME The Company reported net income for the three months ended December 31, 2014 of $142,539, compared to net income of $135,832 for the three months ended December 31, 2013.  This increase of $6,707 is explained above.  The Company reported net income for the six months ended December 31, 2014 of $177,240, compared to net income of $146,969 for the six months ended December 31, 2013.  This increase of $30,271 is explained above. PREFERRED DIVIDENDS Preferred dividends were $32,018 for the three months ended December 31, 2014 and 2013, which reflects additional preferred stock dividends in arrears on the Company’s Series A and Series B $5 par value preferred stock and its Series A and Series B $20 par value preferred stock. Preferred dividends were $64,036 for the six months ended December 31, 2014 and 2013, 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 APPLICABLE TO COMMON STOCKHOLDERS Net income applicable to common stockholders for the three months ended December 31, 2014 was $110,521 which is an increase of $6,707 as compared to the net income for the three months ended December 31, 2013 of $103,814. Net income applicable to common stockholders for the six months ended December 31, 2014 was $113,204 which is an increase of $30,271 as compared to the net income for the six months ended December 31, 2013 of $82,933. LIQUIDITY AND CAPITAL RESOURCES The table below presents the summary of cash flow for the fiscal period indicated.

	Six Months Ended
	December 31
	2014			2013
Net cash provided by operating activities	$	342,808		$	465,619
Net cash used in investing activities	$	(33,876	)	$	(21,132	)
Net cash used in financing activities	$	(18,437	)	$	(34,403	)

19

CHASE GENERAL CORPORATION AND SUBSIDIARY

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

LIQUIDITY AND CAPITAL RESOURCES (CONTINUED) Management has no material commitments for capital expenditures during the remainder of fiscal 2015.  The $33,876 of cash used in investing activities is the purchase of equipment used during the manufacturing process and an automobile.  The $342,808 of cash provided by operating activities is fully detailed in the condensed consolidated statement of cash flows on page seven.  The $18,437 of cash used in financing activities is the principal payments on equipment and vehicle loans. At December 31, 2014, the Company had $350,000 remaining on the line-of-credit, which could be utilized to help fund any working capital requirements. Management believes that the projected cash flow from operations, combined with its existing cash balances, will be sufficient to meet its funding requirements for the foreseeable future. Management believes that inflation will have only a minimal effect on future operations since such effects will be offset by sales price increases, which are not expected to have a significant effect upon demand. CRITICAL ACCOUNTING POLICIES Forward-Looking Information This report, as well as our other reports filed with the Securities and Exchange Commission (“SEC”), contains forward-looking statements made pursuant to the safe harbor provisions of The Private Securities Litigation Reform Act of 1995.  The words “believe,” “estimate,” “anticipate,” “project,” “intend,” “expect,” “plan,” “outlook,” “forecast,” “may,” “will,” “should,” “continue,” “predict” and similar expressions are intended to identify forward-looking statements. This report contains forward-looking statements regarding, among other topics, our expected financial position, results of operations, cash flows, strategy, and management’s plans and objectives.  Accordingly, these forward-looking statements are based on assumptions about a number of important factors.  While we believe that our assumptions about such factors are reasonable, such factors involve risks and uncertainties that could cause actual results to be different from what appear here.  These risk factors include:  the ability to adequately pass through customers unanticipated future increases in raw material costs, decreased demand for products, expected orders that do not occur, loss of key customers, the impact of competition and price erosion as well as supply and manufacturing constraints, and other risks and uncertainties.  In light of these risks and uncertainties, there can be no assurance that the forward-looking information contained in this report will prove accurate, and our actual results may differ materially from these forward-looking statements.  We assume no obligation to update any forward-looking statements made herein.

20

CHASE GENERAL CORPORATION AND SUBSIDIARY

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	Not applicable to a smaller reporting company.
ITEM 4.	CONTROLS AND PROCEDURES

(a)	Evaluation of Disclosure Controls and Procedures
Chase’s Management, with the participation of the Chief Executive Officer, has evaluated the effectiveness of Chase’s disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this report.  Based on such evaluation, the Chief Executive Officer and Management has concluded that Chase’s disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed in periodic filings under the Exchange Act is accumulated and communicated to management, including those officers, and to members of the Board of Directors, to allow timely decisions regarding required disclosure.
(b)	Changes in Internal Control over Financial Reporting
There were no significant changes in Chase’s internal control over financial reporting or in other factors that in management’s estimates are reasonably likely to materially affect Chase’s internal control over financial reporting subsequent to the date of the evaluation.

21

PART II.  OTHER INFORMATION

ITEM 1.              LEGAL PROCEEDINGS

    None.

ITEM 1A.           RISK FACTORS

    Not applicable to a smaller reporting company.

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

    None

ITEM 3.              DEFAULTS UPON SENIOR SECURITIES

    a.     None

    b.     The total cumulative preferred stock dividends contingency at December 31, 2014 is $7,756,698.

ITEM 4.              MINE SAFETY DISCLOSURES

    Not applicable.

ITEM 5.              OTHER INFORMATION

    a.     None

22

PART II.  OTHER INFORMATION (CONTINUED)

ITEM 6.             EXHIBITS

a. Exhibits.

Exhibit 31.1 Certification of Chief Executive Officer and Treasurer pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

Exhibit 32.1 Certification of President and Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 101 The following financial statements for the quarter ended December 31, 2014, formatted in XBRL: (i) Condensed Consolidated Balance Sheets as of December 31, 2014 and June 30, 2014, (ii) Condensed Consolidated Statements of Income for the Three Months Ended December 31, 2014 and 2013, (iii) Condensed Consolidated Statements of Income for the Six Months Ended December 31, 2014 and 2013, (iv) Condensed Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2014 and 2013, and (v) the Notes to Condensed Consolidated Financial Statements, tagged as blocks of text.

23

SIGNATURES

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

	Chase General Corporation and Subsidiary
	(Registrant)
February 13, 2015	/s/ Barry M. Yantis
Date	Barry M. Yantis
	Chairman of the Board, Chief Executive Officer and
	Chief Financial Officer, President and Treasurer

24

EX-31.1

EXHIBIT 31.1

CHASE GENERAL CORPORATION

CERTIFICATION OF THE CHIEF EXECUTIVE AND FINANCIAL OFFICER

PURSUANT TO RULES 13A-14(A) AND 15D-14(A) UNDER THE SECURITIES EXCHANGE

ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Barry M. Yantis, certify that:

1.         I have reviewed this quarterly report on Form 10-Q 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 such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am the certifying officer 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) for the registrant and 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 the registrant, including its consolidated subsidiary, is made known to me by others within those entities, 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 my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. I am the certifying officer and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the registrant’s board of directors (or persons performing the equivalent functions):

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 registrant’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 registrant’s internal control over financial reporting.

February 13, 2015	/s/ Barry M. Yantis
Date	Barry M. Yantis
	Chief Executive Officer and Chief Financial Officer,
	President and Treasurer

EX-32.1

EXHIBIT 32.1

CHASE GENERAL CORPORATION

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Chase General Corporation (the “Company”) on Form 10-Q for the period ended December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Barry M. Yantis, as Chief Executive Officer and Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to 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 this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

February 13, 2015	/s/ Barry M. Yantis
Date	Barry M. Yantis
	Chairman of the Board, Chief Executive Officer and
	Chief Financial Officer, President and Treasurer

XML

INCOME TAXES

6 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 4 - INCOME TAXES

The Company follows the provisions for uncertain tax positions as addressed in Financial Accounting Standards Board Accounting Standards Codification 740-10.  The Company recognized no liability for unrecognized tax benefits at December 31, 2014.  The Company has no material tax positions at December 31, 2014 for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of such deductibility.  The Company had no accruals for interest or penalties at December 31, 2014.  The Company’s federal income tax returns for the fiscal years ended 2012, 2013 and 2014 are subject to examination by the IRS taxing authority.

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NOTES PAYABLE

6 Months Ended

Dec. 31, 2014

Notes Payable [Abstract]

NOTES PAYABLE

NOTE 3 - NOTES PAYABLE

The Company’s long-term debt consists of:

		December 31,		June 30,
Payee	Terms	2014		2014
Nodaway Valley Bank	$350,000 line-of-credit agreement expiring on January 3, 2016, with a variable interest rate at prime but not less than 5%. The line-of-credit is collateralized by substantially all assets of the Company.	$	-	$	-
Ford Credit	$468 monthly payments, interest of 2.9%; final payment due January 2019, secured by a vehicle.		21,228		-
Ford Credit	$517 monthly payments, interest of 0%; final payment due March 2016, secured by a vehicle.		7,750		10,850
Nodaway Valley Bank	$3,192, including interest of 5.75%; final payment due June 2015, secured by equipment; paid in full in December 2014.		-		12,547
Toyota Financial Services	$305 monthly payments including interest of 2.9% due March 2015, secured by a vehicle; paid in full in December 2014.		-		2,790
	Total		28,978		26,187
	Less current portion		10,832		21,537
	Long-term portion	$	18,146	$	4,650

Upon expiration of the line-of-credit agreement on January 3, 2015, the Company entered into a $350,000 line-of-credit agreement that expires on January 3, 2016 with a variable interest rate at prime but not less than 5%.  The line-of-credit is collateralized by substantially all assets of the Company.  Management anticipates renewal of the line-of-credit agreement at similar terms upon expiration.

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

2015	$	10,832
2016		6,772
2017		5,375
2018		5,533
2019		466
Total	$	28,978

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Dec. 31, 2014	Jun. 30, 2014
CURRENT ASSETS
Cash and cash equivalents	$ 452,930	$ 162,435
Trade receivables, net of allowance for doubtful accounts of $17,858 and $16,508, respectively	268,933	178,686
Inventories:
Finished goods	58,389	258,726
Goods in process	15,108	11,950
Raw materials	70,826	80,088
Packaging materials	106,760	145,046
Prepaid expenses	34,621	12,233
Deferred income taxes	6,991	7,047
Total current assets	1,014,558	856,211
PROPERTY AND EQUIPMENT
Land	35,000	35,000
Buildings	77,348	77,348
Machinery and equipment	753,837	739,962
Trucks and autos	196,982	188,594
Office equipment	31,518	31,518
Leasehold improvements	72,068	72,068
Total	1,166,753	1,144,490
Less accumulated depreciation	839,352	841,445
Total property and equipment, net	327,401	303,045
TOTAL ASSETS	1,341,959	1,159,256
CURRENT LIABILITIES
Accounts payable	104,898	51,947
Current maturities of notes payable	10,832	21,537
Accrued expenses	15,072	139,098
Income taxes payable	99,925	21,203
Deferred income	1,299	1,299
Total current liabilities	232,026	235,084
LONG-TERM LIABILITIES
Deferred income	12,012	12,661
Notes payable, less current maturities	18,146	4,650
Deferred income taxes	74,850	79,176
Total long-term liabilities	105,008	96,487
Total liabilities	337,034	331,571
COMMITMENTS AND CONTINGENCIES
Capital stock issued and outstanding:
Common stock, $1 par value	969,834	969,834
Paid-in capital in excess of par	3,134,722	3,134,722
Accumulated deficit	(5,461,071)	(5,638,311)
Total stockholders' equity	1,004,925	827,685
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	1,341,959	1,159,256
Prior cumulative preferred stock, $5 par value: | Series A
Capital stock issued and outstanding:
Preferred stock, value	500,000	500,000
Prior cumulative preferred stock, $5 par value: | Series B
Capital stock issued and outstanding:
Preferred stock, value	500,000	500,000
Cumulative preferred stock, $20 par value | Series A
Capital stock issued and outstanding:
Preferred stock, value	1,170,660	1,170,660
Cumulative preferred stock, $20 par value | Series B
Capital stock issued and outstanding:
Preferred stock, value	$ 190,780	$ 190,780

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GENERAL

6 Months Ended

Dec. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

GENERAL

NOTE 1 - GENERAL

The condensed consolidated balance sheet of Chase General Corporation (hereinafter referred to as “Chase”, “we”, “our”, and “us”) at June 30, 2014 has been taken from audited consolidated financial statements at that date and condensed.  The condensed consolidated financial statements as of and for the three and six months ended December 31, 2014 and for the three and six months ended December 31, 2013 are unaudited and reflect all normal and recurring accruals and adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position, operating results and cash flows for the interim periods presented in this quarterly report.  The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, together with management’s discussion and analysis of financial condition and results of operations, contained in our Annual Report on Form 10-K for the year ended June 30, 2014.  The results of operations for the three and six months ended December 31, 2014 and cash flows for the six months ended December 31, 2014 are not necessarily indicative of the results for the entire fiscal year ending June 30, 2015.  In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to fairly present financial position, results of operations and cash flows for the periods have been included.

No events have occurred subsequent to December 31, 2014, through the date of filing this form, that would require disclosure in this Form 10-Q or would be required to be recognized in the condensed consolidated financial statements as of or for the six month period ended December 31, 2014.

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NOTES PAYABLE (Detail Textuals) (Nodaway Valley Bank: $350,000 line-of-credit agreement expiring on January 3, 2016, with a variable interest rate at prime but not less than 5%, USD $)	6 Months Ended	12 Months Ended
	Dec. 31, 2014	Jun. 30, 2014
Nodaway Valley Bank: $350,000 line-of-credit agreement expiring on January 3, 2016, with a variable interest rate at prime but not less than 5%
Debt Instrument [Line Items]
Line-of-credit agreement, amount	$ 350,000	$ 350,000
Line-of-credit agreement, interest rate description	variable interest rate at prime	variable interest rate at prime
Line-of-credit agreement, interest rate	5.00%	5.00%

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EARNINGS PER SHARE

6 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

EARNINGS PER SHARE

NOTE 2 - EARNINGS PER SHARE

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

	Three Months Ended				Six Months Ended
	December 31				December 31
	2014		2013		2014		2013
Net income	$	142,539	$	135,832	$	177,240	$	146,969
Preferred dividend requirements:
6% Prior Cumulative Preferred, $5 par value		15,000		15,000		30,000		30,000
5% Convertible Cumulative Preferred, $20 par value		17,018		17,018		34,036		34,036
Total dividend requirements		32,018		32,018		64,036		64,036
Net income - common stockholders	$	110,521	$	103,814	$	113,204	$	82,933
Weighted average shares - basic		969,834		969,834		969,834		969,834
Dilutive effect of contingently issuable shares		1,033,334		1,033,334		1,033,334		1,033,334
Weighted average shares - diluted		2,003,168		2,003,168		2,003,168		2,003,168
Basic earnings per share	$	0.11	$	0.11	$	0.12	$	0.09
Diluted earnings per share	$	0.06	$	0.05	$	0.06	$	0.04

Cumulative Preferred Stock dividends in arrears at December 31, 2014 and 2013 totaled $7,756,698 and $7,628,626, respectively.  Total dividends in arrears, on a per share basis, consist of the following:

	Six Months Ended
	December 31
	2014		2013
6% Convertible
Series A	$	17	$	17
Series B	$	16	$	16
5% Convertible
Series A	$	65	$	64
Series B	$	65	$	64

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

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

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $)	Dec. 31, 2014	Jun. 30, 2014
Allowance for doubtful accounts on trade receivables (in dollars)	$ 17,858	$ 16,508
Common stock, par value (in dollars per share)	$ 1	$ 1
Prior cumulative preferred stock, $5 par value: | Series A
Preferred stock, par value (in dollars per share)	$ 5	$ 5
Preferred stock, liquidation preference (in dollars)	2,205,000	2,190,000
Prior cumulative preferred stock, $5 par value: | Series B
Preferred stock, par value (in dollars per share)	$ 5	$ 5
Preferred stock, liquidation preference (in dollars)	2,160,000	2,145,000
Cumulative preferred stock, $20 par value | Series A
Preferred stock, par value (in dollars per share)	$ 20	$ 20
Preferred stock, liquidation preference (in dollars)	4,989,931	4,960,664
Cumulative preferred stock, $20 par value | Series B
Preferred stock, par value (in dollars per share)	$ 20	$ 20
Preferred stock, liquidation preference (in dollars)	$ 813,207	$ 808,438

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EARNINGS PER SHARE (Details 1) (USD $)	6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
6% Prior Convertible Cumulative Preferred Stock - Series A
Class of Stock [Line Items]
Cumulative preferred stock dividends in arrears	$ 17	$ 17
6% Prior Convertible Cumulative Preferred Stock - Series B
Class of Stock [Line Items]
Cumulative preferred stock dividends in arrears	$ 16	$ 16
5% Convertible Cumulative Preferred Stock - Series A
Class of Stock [Line Items]
Cumulative preferred stock dividends in arrears	$ 65	$ 64
5% Convertible Cumulative Preferred Stock - Series B
Class of Stock [Line Items]
Cumulative preferred stock dividends in arrears	$ 65	$ 64

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Document and Entity Information	6 Months Ended
	Dec. 31, 2014	Feb. 12, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	CHASE GENERAL CORP
Entity Central Index Key	0000015357
Current Fiscal Year End Date	--06-30
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		969,834
Document Type	10-Q
Document Period End Date	Dec. 31, 2014
Amendment Flag	false
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2

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EARNINGS PER SHARE (Detail Textuals) (USD $)	6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Class of Stock [Line Items]
Total cumulative preferred stock dividends in arrears	7,756,698	7,628,626
6% Prior Cumulative Preferred, $5 par value
Class of Stock [Line Items]
Redemption price per share (in dollars per share)	5.25	5.25
Preferred stock, liquidation preference per share (in dollars per share)	5.25	5.25
6% Prior Convertible Cumulative Preferred Stock - Series A
Class of Stock [Line Items]
Number of common stock exchanged for each preferred stock held	4	4
6% Prior Convertible Cumulative Preferred Stock - Series B
Class of Stock [Line Items]
Number of common stock exchanged for each preferred stock held	3.75	3.75
5% Convertible Cumulative Preferred, $20 par value
Class of Stock [Line Items]
Redemption price per share (in dollars per share)	21.00	21.00
Preferred stock, liquidation preference per share (in dollars per share)	20.00	20.00
Number of common stock exchanged for each preferred stock held	3.795	3.795

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Income Statement [Abstract]
NET SALES	$ 1,291,273	$ 1,402,545	$ 2,283,181	$ 2,313,805
COST OF SALES	846,057	938,247	1,561,127	1,596,601
Gross profit on sales	445,216	464,298	722,054	717,204
OPERATING EXPENSES
Selling	149,763	161,115	264,404	258,037
General and administrative	90,453	95,111	211,834	233,501
Loss (gain) on sale of equipment	(15,912)	93	(15,912)	93
Total operating expenses	224,304	256,319	460,326	491,631
Income from operations	220,912	207,979	261,728	225,573
OTHER INCOME (EXPENSE)
Miscellaneous income	422	1,972	12,444	2,336
Interest expense	(1,069)	(555)	(1,956)	(3,141)
Total other income (expense), net	(647)	1,417	10,488	(805)
Net income before income taxes	220,265	209,396	272,216	224,768
PROVISION FOR INCOME TAXES	77,726	73,564	94,976	77,799
NET INCOME	$ 142,539	$ 135,832	$ 177,240	$ 146,969
NET INCOME PER SHARE OF COMMON STOCK
- BASIC (in dollars per share)	$ 0.11	$ 0.11	$ 0.12	$ 0.09
- DILUTED (in dollars per share)	$ 0.06	$ 0.05	$ 0.06	$ 0.04

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EARNINGS PER SHARE (Tables)

6 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

Schedule of income per share computed on the weighted average of outstanding common shares

	Three Months Ended				Six Months Ended
	December 31				December 31
	2014		2013		2014		2013
Net income	$	142,539	$	135,832	$	177,240	$	146,969
Preferred dividend requirements:
6% Prior Cumulative Preferred, $5 par value		15,000		15,000		30,000		30,000
5% Convertible Cumulative Preferred, $20 par value		17,018		17,018		34,036		34,036
Total dividend requirements		32,018		32,018		64,036		64,036
Net income - common stockholders	$	110,521	$	103,814	$	113,204	$	82,933
Weighted average shares - basic		969,834		969,834		969,834		969,834
Dilutive effect of contingently issuable shares		1,033,334		1,033,334		1,033,334		1,033,334
Weighted average shares - diluted		2,003,168		2,003,168		2,003,168		2,003,168
Basic earnings per share	$	0.11	$	0.11	$	0.12	$	0.09
Diluted earnings per share	$	0.06	$	0.05	$	0.06	$	0.04

Schedule of total dividends in arrears, on a per share basis

	Six Months Ended
	December 31
	2014		2013
6% Convertible
Series A	$	17	$	17
Series B	$	16	$	16
5% Convertible
Series A	$	65	$	64
Series B	$	65	$	64

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RECENTLY ISSUED ACCOUNTING PRONOUONCEMENTS

6 Months Ended

Dec. 31, 2014

Accounting Changes and Error Corrections [Abstract]

RECENTLY ISSUED ACCOUNTING PRONOUONCEMENTS

NOTE 6 – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In May 2014, the Financial Accounting Standards Board issued new accounting guidance for the recognition of revenue from contracts with customers, which will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective.  The new standard is effective for the Company’s fiscal year 2018, and early adoption is not permitted.  The Company is evaluating the effect the new guidance will have on its consolidated financial statements and related disclosures.  The Company has not yet determined the effect of the standard on its ongoing financial reporting.

There have been no other newly issued or newly applicable accounting pronouncements that have, or are expected to have, a significant impact on the Company's financial statements.

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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION (Details) (USD $)	6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Cash paid for:
Interest	$ 1,956	$ 3,141
Income taxes	28,504	4,105
Non-cash transactions:
Financing of new vehicle	21,228
Sales tax on new vehicle in accounts payable	$ 3,467

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NOTES PAYABLE - Long-term debt (Details) (USD $)	Dec. 31, 2014	Jun. 30, 2014
Debt Instrument [Line Items]
Total	$ 28,978	$ 26,187
Less current portion	10,832	21,537
Long-term portion	18,146	4,650
Nodaway Valley Bank: $350,000 line-of-credit agreement expiring on January 3, 2016, with a variable interest rate at prime but not less than 5%
Debt Instrument [Line Items]
Total
Ford Credit: $468 monthly payments, interest of 2.9%; final payment due January 2019, secured by a vehicle
Debt Instrument [Line Items]
Total	21,228
Ford Credit: $517 monthly payments, interest of 0%; final payment due March 2016, secured by a vehicle
Debt Instrument [Line Items]
Total	7,750	10,850
Nodaway Valley Bank: $3,192, including interest of 5.75%; final payment due June 2015, secured by equipment
Debt Instrument [Line Items]
Total		12,547
Toyota Financial Services: $305 monthly payments including interest of 2.9% due March 2015, secured by a vehicle
Debt Instrument [Line Items]
Total		$ 2,790

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EARNINGS PER SHARE (Details) (USD $)	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Class of Stock [Line Items]
Net income	$ 142,539	$ 135,832	$ 177,240	$ 146,969
Preferred dividend requirements:
Total dividend requirements	32,018	32,018	64,036	64,036
Net income - common stockholders	110,521	103,814	113,204	82,933
Weighted average shares - basic (in shares)	969,834	969,834	969,834	969,834
Dilutive effect of contingently issuable shares (in shares)	1,033,334	1,033,334	1,033,334	1,033,334
Weighted average shares - diluted (in shares)	2,003,168	2,003,168	2,003,168	2,003,168
Basic earnings per share (in dollars per share)	$ 0.11	$ 0.11	$ 0.12	$ 0.09
Diluted earnings per share (in dollars per share)	$ 0.06	$ 0.05	$ 0.06	$ 0.04
6% Prior Cumulative Preferred, $5 par value
Preferred dividend requirements:
Total dividend requirements	15,000	15,000	30,000	30,000
5% Convertible Cumulative Preferred, $20 par value
Preferred dividend requirements:
Total dividend requirements	$ 17,018	$ 17,018	$ 34,036	$ 34,036

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NOTES PAYABLE (Tables)

6 Months Ended

Dec. 31, 2014

Notes Payable [Abstract]

Schedule of long-term debt

		December 31,		June 30,
Payee	Terms	2014		2014
Nodaway Valley Bank	$350,000 line-of-credit agreement expiring on January 3, 2016, with a variable interest rate at prime but not less than 5%. The line-of-credit is collateralized by substantially all assets of the Company.	$	-	$	-
Ford Credit	$468 monthly payments, interest of 2.9%; final payment due January 2019, secured by a vehicle.		21,228		-
Ford Credit	$517 monthly payments, interest of 0%; final payment due March 2016, secured by a vehicle.		7,750		10,850
Nodaway Valley Bank	$3,192, including interest of 5.75%; final payment due June 2015, secured by equipment; paid in full in December 2014.		-		12,547
Toyota Financial Services	$305 monthly payments including interest of 2.9% due March 2015, secured by a vehicle; paid in full in December 2014.		-		2,790
	Total		28,978		26,187
	Less current portion		10,832		21,537
	Long-term portion	$	18,146	$	4,650

Schedule of future minimum payments of long term debt

2015	$	10,832
2016		6,772
2017		5,375
2018		5,533
2019		466
Total	$	28,978

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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION (Tables)

6 Months Ended

Dec. 31, 2014

Supplemental Cash Flow Elements [Abstract]

Schedule of supplemental disclosures of cash flow information

	Six Months Ended
	December 31
	2014		2013
Cash paid for:
Interest	$	1,956	$	3,141
Income taxes		28,504		4,105
Non-cash transactions:
Financing of new vehicle		21,228		-
Sales tax on new vehicle in accounts payable		3,467		-

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EARNINGS PER SHARE (Parentheticals) (Details) (USD $)	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
6% Prior Cumulative Preferred, $5 par value
Class of Stock [Line Items]
Stated percentage of preferred stock	6.00%	6.00%	6.00%	6.00%
Preferred stock, par value (in dollars per share)	$ 5	$ 5	$ 5	$ 5
5% Convertible Cumulative Preferred, $20 par value
Class of Stock [Line Items]
Stated percentage of preferred stock	5.00%	5.00%	5.00%	5.00%
Preferred stock, par value (in dollars per share)	$ 20	$ 20	$ 20	$ 20

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NOTES PAYABLE - Future minimum payments (Details 1) (USD $)	Dec. 31, 2014	Jun. 30, 2014
Notes Payable [Abstract]
2015	$ 10,832
2016	6,772
2017	5,375
2018	5,533
2019	466
Total	$ 28,978	$ 26,187

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $)	6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 177,240	$ 146,969
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	50,127	43,294
Allowance for bad debts	1,350	600
Deferred income amortization	(649)	(649)
Deferred income taxes	(4,270)	(10,519)
Loss (gain) on sale of equipment	(15,912)	93
Effects of changes in operating assets and liabilities:
Trade receivables	(91,597)	(76,808)
Inventories	244,727	268,049
Prepaid expenses	(22,388)	(21,010)
Accounts payable	49,484	43,068
Accrued expenses	(124,026)	(11,603)
Income taxes payable	78,722	84,135
Net cash provided by operating activities	342,808	465,619
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment	(33,876)	(21,132)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from line-of-credit	265,000	290,000
Principal payments on line-of-credit	(265,000)	(290,000)
Principal payments on notes payable	(18,437)	(34,403)
Net cash used in financing activities	(18,437)	(34,403)
NET INCREASE IN CASH AND CASH EQUIVALENTS	290,495	410,084
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	162,435	28,564
CASH AND CASH EQUIVALENTS, END OF PERIOD	$ 452,930	$ 438,648

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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

6 Months Ended

Dec. 31, 2014

Supplemental Cash Flow Elements [Abstract]

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

NOTE 5 - SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

	Six Months Ended
	December 31
	2014		2013
Cash paid for:
Interest	$	1,956	$	3,141
Income taxes		28,504		4,105
Non-cash transactions:
Financing of new vehicle		21,228		-
Sales tax on new vehicle in accounts payable		3,467		-

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NOTES PAYABLE - Long-term debt (Parentheticals) (Details) (USD $)	6 Months Ended	12 Months Ended
	Dec. 31, 2014	Jun. 30, 2014
Nodaway Valley Bank: $350,000 line-of-credit agreement expiring on January 3, 2016, with a variable interest rate at prime but not less than 5%
Debt Instrument [Line Items]
Line-of-credit agreement, amount	$ 350,000	$ 350,000
Interest rate, description	variable interest rate at prime	variable interest rate at prime
Interest rate	5.00%	5.00%
Ford Credit: $468 monthly payments, interest of 2.9%; final payment due January 2019, secured by a vehicle
Debt Instrument [Line Items]
Notes payable, periodic payment	468	468
Notes payable, frequency	monthly	monthly
Interest rate	2.90%	2.90%
Ford Credit: $517 monthly payments, interest of 0%; final payment due March 2016, secured by a vehicle
Debt Instrument [Line Items]
Notes payable, periodic payment	517	517
Notes payable, frequency	monthly	monthly
Interest rate	0.00%	0.00%
Nodaway Valley Bank: $3,192, including interest of 5.75%; final payment due June 2015, secured by equipment
Debt Instrument [Line Items]
Notes payable, periodic payment	3,192	3,192
Interest rate	5.75%	5.75%
Toyota Financial Services: $305 monthly payments including interest of 2.9% due March 2015, secured by a vehicle
Debt Instrument [Line Items]
Notes payable, periodic payment	$ 305	$ 305
Notes payable, frequency	monthly	monthly
Interest rate	2.90%	2.90%