Chase General (CSGN) 10-Q 12 Feb 20 2020 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Dec. 31, 2019	Feb. 11, 2020
Document and Entity Information [Abstract]
Entity Registrant Name	CHASE GENERAL CORP
Entity Central Index Key	0000015357
Trading Symbol	csgn
Current Fiscal Year End Date	--06-30
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		969,834
Document Type	10-Q
Document Period End Date	Dec. 31, 2019
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2019	Jun. 30, 2019
CURRENT ASSETS
Cash and Cash Equivalents	$ 287,207	$ 18,800
Trade Receivables, Net of Allowance for Doubtful Accounts of $13,449 and $12,849, Respectively	164,126	137,869
Inventories:
Finished Goods	25,910	200,085
Goods in Process	7,455	12,999
Raw Materials	72,407	45,456
Packaging Materials	103,307	151,795
Prepaid Expenses	44,219	7,653
Total Current Assets	704,631	574,657
Property and Equipment:
Land	35,000	35,000
Buildings	77,348	77,348
Machinery and Equipment	851,791	851,791
Trucks and Autos	158,632	158,632
Office Equipment	33,025	33,025
Leasehold Improvements	72,068	72,068
Total	1,227,864	1,227,864
Less Accumulated Depreciation	1,044,067	1,016,764
Total Property and Equipment, Net	183,797	211,100
Other Long-Term Assets
Right of Use Assets	346,764	0
Total Long-Term Assets	530,561	211,100
Total Assets	1,235,192	785,757
CURRENT LIABILITIES
Accounts Payable	66,133	78,549
Current Maturities of Notes Payable	12,507	97,133
Current Maturities of Lease Liability	57,374	0
Accrued Expenses	11,415	28,851
Refund Liability Owed to Customers	20,604	10,403
Deferred Income	1,299	1,299
Total Current Liabilities	169,332	216,235
LONG-TERM LIABILITIES
Lease Liability, Less Current Maturities	289,390	0
Notes Payable, Less Current Maturities	14,059	20,408
Deferred Income	5,518	6,168
Total Long-Term Liabilities	308,967	26,576
Total Liabilities	478,299	242,811
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	(5,709,103)	(5,923,050)
Total Stockholders' Equity	756,893	542,946
Total Liabilities and Stockholders' Equity	1,235,192	785,757
Prior Cumulative Preferred Stock - Series A
Capital Stock Issued and Outstanding:
Preferred stock, value	500,000	500,000
Prior Cumulative Preferred Stock - Series B
Capital Stock Issued and Outstanding:
Preferred stock, value	500,000	500,000
Cumulative Preferred Stock - Series A
Capital Stock Issued and Outstanding:
Preferred stock, value	1,170,660	1,170,660
Cumulative Preferred Stock - Series B
Capital Stock Issued and Outstanding:
Preferred stock, value	$ 190,780	$ 190,780

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($)	Dec. 31, 2019	Jun. 30, 2019
Allowance for doubtful accounts on trade receivables (in dollars)	$ 13,449	$ 12,849
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)	$ 2,355,000	$ 2,340,000
Prior Cumulative Preferred Stock - Series B
Preferred stock, liquidation preference (in dollars)	$ 2,310,000	$ 2,295,000
Convertible Cumulative Preferred
Preferred stock, par value (in dollars per share)	$ 20	$ 20
Cumulative Preferred Stock - Series A
Preferred stock, liquidation preference (in dollars)	$ 5,282,596	$ 5,253,329
Cumulative Preferred Stock - Series B
Preferred stock, liquidation preference (in dollars)	$ 860,902	$ 856,133

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
SALES	$ 1,231,459	$ 1,130,629	$ 1,945,540	$ 1,872,149
COST OF SALES	806,670	752,454	1,295,300	1,278,775
Gross Profit on Sales	424,789	378,175	650,240	593,374
OPERATING EXPENSES
Selling	100,223	95,514	178,178	168,417
General and Administrative	111,835	97,329	256,224	235,813
Total Operating Expenses	212,058	192,843	434,402	404,230
Income from Operations	212,731	185,332	215,838	189,144
OTHER INCOME (EXPENSE)
Miscellaneous Income	433	3,462	3,306	3,825
Interest Expense	(3,515)	(3,056)	(5,197)	(5,941)
Total Other Income (Expense)	(3,082)	406	(1,891)	(2,116)
Income before Income Taxes	209,649	185,738	213,947	187,028
PROVISION FOR INCOME TAXES	0	3,400	0	3,400
NET INCOME	$ 209,649	$ 182,338	$ 213,947	$ 183,628
EARNINGS PER SHARE
Basic (in dollars per share)	$ 0.18	$ 0.14	$ 0.15	$ 0.11
Diluted (in dollars per share)	$ 0.09	$ 0.07	$ 0.07	$ 0.05

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$ 213,947	$ 183,628
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation and Amortization	27,303	28,429
Allowance for Bad Debts	600	600
Deferred Income Amortization	(650)	(649)
Deferred Income Taxes	0	3,400
Effects of Changes in Operating Assets and Liabilities:
Trade Receivables	(26,857)	(52,487)
Inventories	201,256	192,551
Prepaid Expenses	(36,566)	(32,298)
Accounts Payable	(12,416)	(84,492)
Accrued Expenses	(17,436)	(23,763)
Refund Liability Owed to Customers	10,201	37,624
Net Cash Provided by Operating Activities	359,382	252,543
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Line-of-Credit	227,000	340,000
Principal Payments on Line-of-Credit	(312,000)	(340,000)
Principal Payments on Notes Payable	(5,975)	(5,542)
Net Cash Used by Financing Activities	(90,975)	(5,542)
NET INCREASE IN CASH AND CASH EQUIVALENTS	268,407	247,001
Cash and Cash Equivalents - Beginning of Period	18,800	2,129
CASH AND CASH EQUIVALENTS - END OF PERIOD	$ 287,207	$ 249,130

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Dec. 31, 2019
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES	NOTE 1 SIGNIFICANT ACCOUNTING POLICIES General The condensed consolidated balance sheet of Chase General Corporation (hereinafter referred to as “Chase”, “we”, “our”, and “us”) at June 30, 2019 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, 2019 and for the three and six months ended December 31, 2018 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, 2019. The results of operations for the three and six months ended December 31, 2019 and cash flows for the six months ended December 31, 2019 are not necessarily indicative of the results for the entire fiscal year ending June 30, 2020. 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, 2019, 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, 2019. Revenue Recognition The majority of our revenue is derived by fulfilling customer orders for the purchase of our products, including 1) a candy bar marketed under the trade name “Cherry Mash” and 2) coconut, peanut, chocolate, and fudge confectioneries. The Company recognizes revenue at the point in time that control of the ordered product(s) is transferred to the customer, which is typically upon shipment to the customer. Shipping and handling costs incurred to ship product to the customer are recorded within cost of sales. Amounts billed and due from our customers are classified as accounts receivables on the balance sheet and require payment on a short-term basis. Generally, individual orders from customers are accounted for as a single performance obligation. Revenue is measured as the amount of consideration we expect to receive in exchange for fulfilling product orders. Sales, value 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 in second quarter of the year ending June 30, 2020 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 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. The various divisions of revenue are as follows: For the three months ended December 31, 2019 2019 2018 Sales - Chase Candy $ 499,762 $ 474,199 Sales - Seasonal Candy 731,697 656,430 Sales $ 1,231,459 $ 1,130,629 For the six months ended December 31, 2019 2019 2018 Sales - Chase Candy $ 857,945 $ 768,486 Sales - Seasonal Candy 1,087,595 1,103,663 Sales $ 1,945,540 $ 1,872,149 Recently Adopted Pronouncements The Company adopted the guidance of ASU No. 2016-02, Leases, (ASC 842) as of July 1, 2019 using the modified retrospective transition approach with the cumulative effect recognized at the date of initial application. The comparative information in the prior year has not been adjusted and continues to be reported under ASC 840, Leases, which was the accounting standard in effect for that period. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all, and disclose key leasing information. The Company elected a package of practical expedients permitted under the transition guidance, which among other things, allows us to carryforward the historical lease classification, and exclude from balance sheet reporting those leases with initial terms of 12 months or less. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. Adoption of the new standard on July 1, 2019 resulted in the recording of operating lease ROU assets and lease liabilities in the amount of $376,105. The standard did not materially affect the Company’s consolidated net income or cash flows. See Note 7—Leases for the required disclosures of the nature, amount, timing, and uncertainty of cash flows arising from leases. Recently Issued Pronouncements There have been no newly issued or newly applicable accounting pronouncements that have, or are expected to have, a significant impact on the Company’s consolidated financial statements

EARNINGS PER SHARE

EARNINGS PER SHARE	6 Months Ended
	Dec. 31, 2019
EARNINGS PER SHARE
EARNINGS PER SHARE	NOTE 2 EARNINGS PER SHARE The earnings per share were computed on the weighted average of outstanding common shares during the period. Diluted earnings per share are calculated by including contingently issuable shares with the weighted average shares outstanding. Three Months Ended Six Months Ended December 31 December 31 2019 2018 2019 2018 Net Income $ 209,649 $ 182,338 $ 213,947 $ 183,628 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 $ 177,631 $ 150,320 $ 149,911 $ 119,592 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 $ 0.18 $ 0.14 $ 0.15 $ 0.11 Diluted Earnings per Share $ 0.09 $ 0.07 $ 0.07 $ 0.05 Cumulative Preferred Stock dividends in arrears at December 31, 2019 and 2018 totaled $8,397,058 and $8,268,986, respectively. Total dividends in arrears, on a per share basis, consist of the following: Six Months Ended December 31 2019 2018 6% Convertible Series A $ 18 $ 18 Series B 18 18 5% Convertible Series A $ 70 $ 69 Series B 70 69 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.

NOTES PAYABLE

NOTES PAYABLE	6 Months Ended
	Dec. 31, 2019
NOTES PAYABLE
NOTES PAYABLE	NOTE 3 NOTES PAYABLE The Company’s long-term debt consists of: December 31, June 30, Payee Terms 2019 2019 Nodaway Valley Bank $350,000 line-of-credit agreement expiring on January 4, 2021, 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. $ — $ 85,000 Ford Credit $705 monthly payments, interest of 5.8%; final payment due October 2021, secured by a vehicle. 14,670 18,407 Toyota Credit $444 monthly payments, interest of 6.49%; final payment due May 2022, secured by a vehicle. 11,896 14,134 Total 26,566 117,541 Less Current Portion 12,507 97,133 Long-Term Portion $ 14,059 $ 20,408 Future minimum payments for the twelve months ending December 31 are: December 31: Amount 2020 $ 12,507 2021 11,877 2022 2,182 Total $ 26,566

INCOME TAXES

INCOME TAXES	6 Months Ended
	Dec. 31, 2019
INCOME TAXES
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, 2019. The Company has no material tax positions at December 31, 2019 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, 2019. The Company’s federal income tax returns for the fiscal years ended 2017, 2018 and 2019 are subject to examination by the Internal Revenue Service taxing authority.

SUPPLEMENTAL DISCLOSURES OF CAS

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION	6 Months Ended
	Dec. 31, 2019
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION	NOTE 5 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Six Months Ended December 31 2019 2018 Cash Paid for: Interest $ 5,197 $ 5,941 Income Taxes $ — $ —

DISCLOSURES ABOUT FAIR VALUE OF

DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS	6 Months Ended
	Dec. 31, 2019
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS	NOTE 6 DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS The Company’s financial instruments consist principally of cash and cash equivalents, trade receivables and payables, and notes payable. There are no significant differences between the carrying value and fair value of any of these consolidated financial instruments. As of December 31, 2019, the amount of the Company’s long-term debt approximates fair value based on the present value of estimated future cash flows using a discount rate commensurate with a borrowing rate available to the Company.

LEASES

LEASES	6 Months Ended
	Dec. 31, 2019
LEASES
LEASES	NOTE 7 LEASES The Company adopted ASC 842 on July 1, 2019 using the modified retrospective transition method; and therefore, the comparative information has not been adjusted for the three months ended December 31, 2018 or as of June 30, 2019. The Company leases its office and manufacturing facility, located at 1307 South 59 th , St. Joseph, Missouri under an operating lease from an entity that is partially owned by the son of the Chief Executive Officer of the Company. The lease term is from February 1, 2005 through March 31, 2025 with an option to extend for an additional term of five years. The Company does not believe that exercise of the renewal option is reasonably assured, and has not included the additional five years in the lease term. The lease currently requires payments of $6,500 per month. Operating lease right-of-use assets and lease liabilities were recognized upon adoption of the lease standard based on the present value of minimum lease payments over the remaining lease term. The Company's operating lease has a remaining term of 5.5 years and the present value of the lease payments is calculated using the lessor's implicit rate of 6.43%. 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 non-lease 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. Operating lease expenses and cash paid for operating lease liabilities were $39,000 for the six months ended December 31, 2019, of which, $35,782 is included in cost of sales and $3,218 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 December 31, 2019 are as follows: Twelve months ending December 31, 2020 $ 78,000 2021 78,000 2022 78,000 2023 78,000 2024 78,000 Thereafter 19,500 Total lease payments 409,500 Less imputed interest 62,736 Total lease payments $ 346,764

SIGNIFICANT ACCOUNTING POLICI_2

SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Dec. 31, 2019
SIGNIFICANT ACCOUNTING POLICIES
General	General The condensed consolidated balance sheet of Chase General Corporation (hereinafter referred to as “Chase”, “we”, “our”, and “us”) at June 30, 2019 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, 2019 and for the three and six months ended December 31, 2018 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, 2019. The results of operations for the three and six months ended December 31, 2019 and cash flows for the six months ended December 31, 2019 are not necessarily indicative of the results for the entire fiscal year ending June 30, 2020. 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, 2019, 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, 2019.
Revenue Recognition	Revenue Recognition The majority of our revenue is derived by fulfilling customer orders for the purchase of our products, including 1) a candy bar marketed under the trade name “Cherry Mash” and 2) coconut, peanut, chocolate, and fudge confectioneries. The Company recognizes revenue at the point in time that control of the ordered product(s) is transferred to the customer, which is typically upon shipment to the customer. Shipping and handling costs incurred to ship product to the customer are recorded within cost of sales. Amounts billed and due from our customers are classified as accounts receivables on the balance sheet and require payment on a short-term basis. Generally, individual orders from customers are accounted for as a single performance obligation. Revenue is measured as the amount of consideration we expect to receive in exchange for fulfilling product orders. Sales, value 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 in second quarter of the year ending June 30, 2020 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 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. The various divisions of revenue are as follows: For the three months ended December 31, 2019 2019 2018 Sales - Chase Candy $ 499,762 $ 474,199 Sales - Seasonal Candy 731,697 656,430 Sales $ 1,231,459 $ 1,130,629 For the six months ended December 31, 2019 2019 2018 Sales - Chase Candy $ 857,945 $ 768,486 Sales - Seasonal Candy 1,087,595 1,103,663 Sales $ 1,945,540 $ 1,872,149
Recently Adopted Pronouncements	Recently Adopted Pronouncements The Company adopted the guidance of ASU No. 2016-02, Leases, (ASC 842) as of July 1, 2019 using the modified retrospective transition approach with the cumulative effect recognized at the date of initial application. The comparative information in the prior year has not been adjusted and continues to be reported under ASC 840, Leases, which was the accounting standard in effect for that period. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all, and disclose key leasing information. The Company elected a package of practical expedients permitted under the transition guidance, which among other things, allows us to carryforward the historical lease classification, and exclude from balance sheet reporting those leases with initial terms of 12 months or less. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. Adoption of the new standard on July 1, 2019 resulted in the recording of operating lease ROU assets and lease liabilities in the amount of $376,105. The standard did not materially affect the Company’s consolidated net income or cash flows. See Note 7—Leases for the required disclosures of the nature, amount, timing, and uncertainty of cash flows arising from leases. Recently Issued Pronouncements There have been no newly issued or newly applicable accounting pronouncements that have, or are expected to have, a significant impact on the Company’s consolidated financial statements

SIGNIFICANT ACCOUNTING POLICI_3

SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Dec. 31, 2019
SIGNIFICANT ACCOUNTING POLICIES
Schedule of divisions of revenue	For the three months ended December 31, 2019 2019 2018 Sales - Chase Candy $ 499,762 $ 474,199 Sales - Seasonal Candy 731,697 656,430 Sales $ 1,231,459 $ 1,130,629 For the six months ended December 31, 2019 2019 2018 Sales - Chase Candy $ 857,945 $ 768,486 Sales - Seasonal Candy 1,087,595 1,103,663 Sales $ 1,945,540 $ 1,872,149

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	6 Months Ended
	Dec. 31, 2019
EARNINGS PER SHARE
Schedule of earnings per share computed on the weighted average of outstanding common shares	Three Months Ended Six Months Ended December 31 December 31 2019 2018 2019 2018 Net Income $ 209,649 $ 182,338 $ 213,947 $ 183,628 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 $ 177,631 $ 150,320 $ 149,911 $ 119,592 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 $ 0.18 $ 0.14 $ 0.15 $ 0.11 Diluted Earnings per Share $ 0.09 $ 0.07 $ 0.07 $ 0.05
Schedule of total dividends in arrears, on a per share basis	Six Months Ended December 31 2019 2018 6% Convertible Series A $ 18 $ 18 Series B 18 18 5% Convertible Series A $ 70 $ 69 Series B 70 69

NOTES PAYABLE (Tables)

NOTES PAYABLE (Tables)	6 Months Ended
	Dec. 31, 2019
NOTES PAYABLE
Schedule of long-term debt	December 31, June 30, Payee Terms 2019 2019 Nodaway Valley Bank $350,000 line-of-credit agreement expiring on January 4, 2021, 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. $ — $ 85,000 Ford Credit $705 monthly payments, interest of 5.8%; final payment due October 2021, secured by a vehicle. 14,670 18,407 Toyota Credit $444 monthly payments, interest of 6.49%; final payment due May 2022, secured by a vehicle. 11,896 14,134 Total 26,566 117,541 Less Current Portion 12,507 97,133 Long-Term Portion $ 14,059 $ 20,408
Schedule of future minimum payments of long term debt	December 31: Amount 2020 $ 12,507 2021 11,877 2022 2,182 Total $ 26,566

SUPPLEMENTAL DISCLOSURES OF C_2

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION (Tables)	6 Months Ended
	Dec. 31, 2019
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Schedule of supplemental disclosures of cash flow information	Six Months Ended December 31 2019 2018 Cash Paid for: Interest $ 5,197 $ 5,941 Income Taxes $ — $ —

LEASES (Tables)

LEASES (Tables)	6 Months Ended
	Dec. 31, 2019
LEASES
Schedule of annual payments	Twelve months ending December 31, 2020 $ 78,000 2021 78,000 2022 78,000 2023 78,000 2024 78,000 Thereafter 19,500 Total lease payments 409,500 Less imputed interest 62,736 Total lease payments $ 346,764

SIGNIFICANT ACCOUNTING POLICI_4

SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Disaggregation of Revenue [Line Items]
Sales	$ 1,231,459	$ 1,130,629	$ 1,945,540	$ 1,872,149
Sales - Chase Candy
Disaggregation of Revenue [Line Items]
Sales	499,762	474,199	857,945	768,486
Sales - Seasonal Candy
Disaggregation of Revenue [Line Items]
Sales	$ 731,697	$ 656,430	$ 1,087,595	$ 1,103,663

SIGNIFICANT ACCOUNTING POLICI_5

SIGNIFICANT ACCOUNTING POLICIES - Additional information (Details)	6 Months Ended
	Dec. 31, 2019USD ($)segmentdivision	Jul. 01, 2019USD ($)	Jun. 30, 2019USD ($)
SIGNIFICANT ACCOUNTING POLICIES
Number of product divisions | division	2
Number of reportable segment | segment	1
Operating Lease, Right-of-Use Asset	$ 346,764	$ 376,105	$ 0
Operating Lease, Liability	$ 346,764	$ 376,105

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Class of Stock [Line Items]
Net Income	$ 209,649	$ 182,338	$ 213,947	$ 183,628
Preferred Dividend Requirements:
Total Dividend Requirements	32,018	32,018	64,036	64,036
Net Income - Common Stockholders	$ 177,631	$ 150,320	$ 149,911	$ 119,592
Weighted Average Shares - Basic (in shares)	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 (in shares)	2,003,168	2,003,168	2,003,168	2,003,168
Basic Earnings per Share (in dollars per share)	$ 0.18	$ 0.14	$ 0.15	$ 0.11
Diluted Earnings per Share (in dollars per share)	$ 0.09	$ 0.07	$ 0.07	$ 0.05
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

EARNINGS PER SHARE (Parenthetic

EARNINGS PER SHARE (Parentheticals) (Details) - $ / shares	3 Months Ended		6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
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

EARNINGS PER SHARE - Cumulative

EARNINGS PER SHARE - Cumulative Preferred Stock dividends (Details) - $ / shares	6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Prior Cumulative Preferred Stock - Series A
Class of Stock [Line Items]
Total dividends in arrears	$ 18	$ 18
Prior Cumulative Preferred Stock - Series B
Class of Stock [Line Items]
Total dividends in arrears	18	18
Cumulative Preferred Stock - Series A
Class of Stock [Line Items]
Total dividends in arrears	70	69
Cumulative Preferred Stock - Series B
Class of Stock [Line Items]
Total dividends in arrears	$ 70	$ 69

EARNINGS PER SHARE - Additional

EARNINGS PER SHARE - Additional information (Details)	6 Months Ended
	Dec. 31, 2019USD ($)$ / shares	Dec. 31, 2018USD ($)$ / shares
Class of Stock [Line Items]
Total cumulative preferred stock dividends in arrears | $	$ 8,397,058	$ 8,268,986
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
Prior Cumulative Preferred Stock - Series A
Class of Stock [Line Items]
Number of common stock exchanged for each preferred stock held	4	4
Prior 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	$ 21
Preferred stock, liquidation preference per share (in dollars per share)	$ 20	$ 20
Number of common stock exchanged for each preferred stock held	3.795	3.795

NOTES PAYABLE - Long-term debt

NOTES PAYABLE - Long-term debt (Details) - USD ($)	Dec. 31, 2019	Jun. 30, 2019
Debt Instrument [Line Items]
Total	$ 26,566	$ 117,541
Less Current Portion	12,507	97,133
Long-Term Portion	14,059	20,408
Nodaway Valley Bank: $350,000 line-of-credit agreement expiring on January 4, 2021, 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.
Debt Instrument [Line Items]
Total	0	85,000
Ford Credit: $705 monthly payments, interest of 5.8%; final payment due October 2021, secured by a vehicle.
Debt Instrument [Line Items]
Total	14,670	18,407
Toyota Credit: $444 monthly payments, interest of 6.49%; final payment due May 2022, secured by a vehicle.
Debt Instrument [Line Items]
Total	$ 11,896	$ 14,134

NOTES PAYABLE - Long-term deb_2

NOTES PAYABLE - Long-term debt (Parentheticals) (Details) - USD ($)	6 Months Ended	12 Months Ended
	Dec. 31, 2019	Jun. 30, 2019
Nodaway Valley Bank: $350,000 line-of-credit agreement expiring on January 4, 2021, 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.
Debt Instrument [Line Items]
Line-of-credit agreement, amount	$ 350,000	$ 350,000
Line of Credit Facility, Expiration date	Jan. 4, 2021	Jan. 4, 2021
Basis Spread on Variable Rate	5.00%	5.00%
Ford Credit: $705 monthly payments, interest of 5.8%; final payment due October 2021, secured by a vehicle.
Debt Instrument [Line Items]
Notes payable, periodic payment	$ 705	$ 705
Interest rate	5.80%	5.80%
Maturity date	Oct. 31, 2021	Oct. 31, 2021
Toyota Credit: $444 monthly payments, interest of 6.49%; final payment due May 2022, secured by a vehicle.
Debt Instrument [Line Items]
Notes payable, periodic payment	$ 444	$ 444
Interest rate	6.49%	6.49%
Maturity date	May 1, 2022	May 1, 2022

NOTES PAYABLE - Future minimum

NOTES PAYABLE - Future minimum payments (Details) - USD ($)	Dec. 31, 2019	Jun. 30, 2019
NOTES PAYABLE
2020	$ 12,507
2021	11,877
2022	2,182
Total	$ 26,566	$ 117,541

INCOME TAXES (Details)

INCOME TAXES (Details)	Dec. 31, 2019USD ($)
INCOME TAXES
Accruals for interest or penalties	$ 0
Unrecognized Tax Benefits	$ 0

SUPPLEMENTAL DISCLOSURES OF C_3

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION (Details) - USD ($)	6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Cash Paid for:
Interest	$ 5,197	$ 5,941
Income Taxes	$ 0	$ 0

LEASES - Annual payments (Detai

LEASES - Annual payments (Details) - USD ($)	Dec. 31, 2019	Jul. 01, 2019
LEASES
Twelve months ending December 31, 2020	$ 78,000
2021	78,000
2022	78,000
2023	78,000
2024	78,000
Thereafter	19,500
Total lease payments	409,500
Less imputed interest	62,736
Total lease payments	$ 346,764	$ 376,105

LEASES - Additional information

LEASES - Additional information (Details)	6 Months Ended
	Dec. 31, 2019USD ($)
LEASES
Option to extend	True
Additional term	5 years
Lease payments	$ 6,500
Operating lease remaining term	5 years 6 months
Operating Lease lessor's implicit rate	6.43%
Operating lease liabilities	$ 39,000
Cost of sales
LEASES
Operating lease liabilities	35,782
General and administrative expenses
LEASES
Operating lease liabilities	$ 3,218