Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2023 | May 12, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 2-5916 | |
Entity Registrant Name | CHASE GENERAL CORP | |
Entity Incorporation, State or Country Code | MO | |
Entity Tax Identification Number | 36-2667734 | |
Entity Address, Address Line One | 1307 South 59th, | |
Entity Address, City or Town | St. Joseph, | |
Entity Address, State or Province | MO | |
Entity Address, Postal Zip Code | 64507 | |
City Area Code | 816 | |
Local Phone Number | 279-1625 | |
Title of 12(b) Security | None | |
Trading Symbol | Not Applicable | |
Security Exchange Name | NONE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 969,834 | |
Entity Central Index Key | 0000015357 | |
Current Fiscal Year End Date | --06-30 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) | Mar. 31, 2023 | Jun. 30, 2022 |
CURRENT ASSETS | ||
Cash and Cash Equivalents | $ 176,088 | $ 13,511 |
Trade Receivables, Net of Allowance for Doubtful Accounts of $1,659 and $948, Respectively | 252,658 | 141,336 |
Inventories: | ||
Finished Goods | 58,531 | 360,225 |
Goods in Process | 18,793 | 18,603 |
Raw Materials | 129,499 | 93,326 |
Packaging Materials | 243,232 | 293,123 |
Prepaid Expenses | 30,910 | 6,640 |
Total Current Assets | 909,711 | 926,764 |
PROPERTY AND EQUIPMENT | ||
Land | 35,000 | 35,000 |
Buildings | 77,348 | 77,348 |
Machinery and Equipment | 886,341 | 886,341 |
Trucks and Autos | 170,378 | 158,632 |
Office Equipment | 33,025 | 33,025 |
Leasehold Improvements | 72,068 | 72,068 |
Total | 1,274,160 | 1,262,414 |
Less: Accumulated Depreciation | (1,065,209) | (1,149,835) |
Total Property and Equipment, Net | 208,951 | 112,579 |
OTHER LONG-TERM ASSETS | ||
Right-of-use Asset | 425,091 | 196,126 |
Total Long-Term Assets | 634,042 | 308,705 |
Total Assets | 1,543,753 | 1,235,469 |
CURRENT LIABILITIES | ||
Accounts Payable | 55,619 | 135,705 |
Current Maturities of Notes Payable | 12,311 | 120,000 |
Current Maturities of Lease Liability | 47,319 | 67,351 |
Accrued Expenses | 34,426 | 32,598 |
Refund Liability Owed to Customers | 11,000 | 8,209 |
Deferred Income | 1,299 | 1,299 |
Total Current Liabilities | 161,974 | 365,162 |
LONG-TERM LIABILITIES | ||
Notes Payable, Less Current Maturities | 34,625 | |
Lease Liability, Less Current Maturities | 377,772 | 128,775 |
Deferred Income | 1,297 | 2,271 |
Total Long-Term Liabilities | 413,694 | 131,046 |
Total Liabilities | 575,668 | 496,208 |
COMMITMENTS AND CONTINGENCIES (NOTE 7) | ||
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 | (5,497,911) | (5,726,735) |
Total Stockholders' Equity | 968,085 | 739,261 |
Total Liabilities and Stockholders' Equity | 1,543,753 | 1,235,469 |
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 (UNAUDITED) (Parentheticals) - USD ($) | Mar. 31, 2023 | Jun. 30, 2022 |
Allowance for doubtful accounts on trade receivables (in dollars) | $ 1,659 | $ 948 |
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) | $ 2,452,500 | $ 2,430,000 |
Prior Cumulative Preferred Stock - Series B | ||
Preferred stock, liquidation preference (in dollars) | $ 2,407,500 | $ 2,385,000 |
Convertible Cumulative Preferred | ||
Preferred stock, par value (in dollars per share) | $ 20 | $ 20 |
Cumulative Preferred Stock - Series A | ||
Preferred stock, liquidation preference (in dollars) | $ 5,472,828 | $ 5,428,928 |
Cumulative Preferred Stock - Series B | ||
Preferred stock, liquidation preference (in dollars) | $ 891,904 | $ 884,750 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||
SALES | $ 507,918 | $ 565,035 | $ 2,950,139 | $ 2,663,343 |
COST OF SALES | 413,581 | 417,064 | 1,982,663 | 1,839,094 |
Gross Profit on Sales | 94,337 | 147,971 | 967,476 | 824,249 |
OPERATING EXPENSES | ||||
Selling | 69,973 | 75,451 | 278,509 | 259,360 |
General and Administrative | 107,592 | 138,287 | 454,128 | 466,592 |
Total Operating Expenses | 177,565 | 213,738 | 732,637 | 725,952 |
Loss from Operations | (83,228) | (65,767) | 234,839 | 98,297 |
OTHER INCOME (EXPENSE) | ||||
Miscellaneous Income | 559 | 546 | 1,333 | 1,327 |
Interest Expense | (355) | (29) | (7,348) | (4,057) |
Total Other Income, net | 204 | 517 | (6,015) | (2,730) |
Loss before Income Taxes | (83,024) | (65,250) | 228,824 | 95,567 |
INCOME TAX BENEFIT (PROVISION) | 0 | |||
NET LOSS | $ (83,024) | $ (65,250) | $ 228,824 | $ 95,567 |
LOSS PER SHARE | ||||
Basic (in dollars per share) | $ (0.12) | $ (0.10) | $ 0.14 | $ 0 |
Diluted (in dollars per share) | $ (0.12) | $ (0.10) | $ 0.11 | $ 0 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) | Prior Cumulative Preferred Stock - Series A Preferred Stock | Prior Cumulative Preferred Stock - Series B Preferred Stock | Cumulative Preferred Stock - Series A Preferred Stock | Cumulative Preferred Stock - Series B Preferred Stock | Common Stock | Paid-In Capital | Accumulated Deficit | Total |
BALANCE, Beginning of period at Jun. 30, 2021 | $ 500,000 | $ 500,000 | $ 1,170,660 | $ 190,780 | $ 969,834 | $ 3,134,722 | $ (5,705,366) | $ 760,630 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Income | 95,567 | 95,567 | ||||||
BALANCE, End of period at Mar. 31, 2022 | 500,000 | 500,000 | 1,170,660 | 190,780 | 969,834 | 3,134,722 | (5,609,799) | 856,197 |
BALANCE, Beginning of period at Dec. 31, 2021 | 500,000 | 500,000 | 1,170,660 | 190,780 | 969,834 | 3,134,722 | (5,544,549) | 921,447 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Income | (65,250) | (65,250) | ||||||
BALANCE, End of period at Mar. 31, 2022 | 500,000 | 500,000 | 1,170,660 | 190,780 | 969,834 | 3,134,722 | (5,609,799) | 856,197 |
BALANCE, Beginning of period at Jun. 30, 2022 | 500,000 | 500,000 | 1,170,660 | 190,780 | 969,834 | 3,134,722 | (5,726,735) | 739,261 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Income | 228,824 | 228,824 | ||||||
BALANCE, End of period at Mar. 31, 2023 | 500,000 | 500,000 | 1,170,660 | 190,780 | 969,834 | 3,134,722 | (5,497,911) | 968,085 |
BALANCE, Beginning of period at Dec. 31, 2022 | 500,000 | 500,000 | 1,170,660 | 190,780 | 969,834 | 3,134,722 | (5,414,887) | 1,051,109 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Income | (83,024) | (83,024) | ||||||
BALANCE, End of period at Mar. 31, 2023 | $ 500,000 | $ 500,000 | $ 1,170,660 | $ 190,780 | $ 969,834 | $ 3,134,722 | $ (5,497,911) | $ 968,085 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 9 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Income | $ 228,824 | $ 95,567 |
Adjustments to Reconcile Net Income to Net Cash Used in Operating Activities: | ||
Depreciation and Amortization | 30,897 | 28,935 |
Allowance for Bad Debts | 711 | (14,237) |
Deferred Income Amortization | (974) | (974) |
Gain on Sale of Property and Equipment | (43,681) | |
Effects of Changes in Operating Assets and Liabilities: | ||
Trade Receivables | (112,033) | (8,312) |
Inventories | 315,222 | 175,280 |
Prepaid Expenses | (24,270) | (8,489) |
Accounts Payable | (80,086) | 95,455 |
Refund Liability Owed to Customers | 2,791 | 8,199 |
Accrued Expenses | 1,828 | (1,794) |
Net Cash Provided by Operating Activities | 319,229 | 369,630 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of Property and Equipment | (60,688) | |
Proceeds from disposal of property and equipment | 28,000 | |
Net Cash Used in Investing Activities | (32,688) | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from Lines-of-Credit | 330,000 | 255,000 |
Principal Payments on Line-of-Credit | (450,000) | (375,000) |
Principal Payments on Notes Payable | (3,964) | (3,852) |
Net Cash Used in Financing Activities | (123,964) | (123,852) |
INCREASE IN CASH AND CASH EQUIVALENTS | 162,577 | 245,778 |
Cash and Cash Equivalents - Beginning of Period | 13,511 | 7,115 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | $ 176,088 | $ 252,893 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Mar. 31, 2023 | |
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, the Company, we, our, and us) at June 30, 2022 has been taken from audited consolidated financial statements at that date and condensed. The condensed consolidated financial statements as of and for the three and nine months ended March 31, 2023 and for the three and nine months ended March 31, 2022 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, 2022. The results of operations for the three and nine months ended March 31, 2023 and cash flows for the nine months ended March 31, 2023 are not necessarily indicative of the results for the entire fiscal year ending June 30, 2023. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to fairly present financial position, results of operations, and cash flows for the periods have been included. Revenue Recognition The majority of our revenue is derived by fulfilling customer orders for the purchase of our products, including 1) a candy bar marketed under the trade name “Cherry Mash” and 2) coconut, peanut, chocolate, and fudge confectioneries. The Company recognizes revenue at the point in time that control of the ordered product(s) is transferred to the customer, which is typically upon shipment to the customer. Shipping and handling costs incurred to ship product to the customer are recorded within cost of sales. Amounts billed and due from our customers are classified as trade receivables on the consolidated balance sheet and require payment on a short-term basis. Generally, individual orders from customers are accounted for as a single performance obligation. Revenue is measured as the amount of consideration we expect to receive in exchange for fulfilling product orders. Sales, value added, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. The amount of consideration the Company expects to receive and revenue the Company recognizes includes estimates of variable consideration, including costs for trade promotional programs, customer incentives, and allowances and discounts associated with aged or potentially unsaleable products. These estimates are based upon our analysis of the programs offered, historical trends, and expectations regarding customer and consumer participation, sales and payment trends and our experience with payment patterns associated with similar programs offered in the past. The Company reviews and updates these estimates regularly and the impact of any adjustments are recognized in the period the adjustments are identified. NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (cont.) Revenue Recognition (cont.) The majority of the Company’s products are confectionery and confectionery-based and, therefore, exhibit similar economic characteristics, such that they are based on similar ingredients and are marketed and sold through the same channels to the same customers. The Company operates two divisions, Chase Candy Products and Seasonal Candy Products. Chase Candy Products involve production and sale of a candy bar marketed under the trade name “Cherry Mash”. The Seasonal Candy Products involve production and sale of coconut, peanut, chocolate, and fudge confectioneries. Both divisions share a common labor force and utilize the same basic equipment and raw materials. Management considers these two divisions as one reportable segment. The various divisions of revenue are as follows: For the three months ended March 31, 2023 2022 Sales - Chase Candy $ 496,012 $ 552,692 Sales - Seasonal Candy 11,906 12,343 Sales $ 507,918 $ 565,035 For the nine months ended March 31, 2023 2022 Sales - Chase Candy $ 1,465,662 $ 1,458,699 Sales - Seasonal Candy 1,484,477 1,204,644 Sales $ 2,950,139 $ 2,663,343 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. Subsequent Events No events have occurred subsequent to March 31, 2023, through the date of filing this form, that would require disclosure in this Form 10-Q or would be required to be recognized in the condensed consolidated financial statements as of or for the nine month period ended March 31, 2023 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Mar. 31, 2023 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 2 EARNINGS PER SHARE The earnings per share was 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 Nine Months Ended March 31st March 31, 2023 2022 2023 2022 Net Income (Loss) $ (83,024) $ (65,250) $ 228,824 $ 95,567 Preferred Dividend Requirements: 6% Prior Cumulative Preferred, $5 Par Value 15,000 15,000 45,000 45,000 5% Convertible Cumulative Preferred, $20 Par Value 17,018 17,018 51,054 51,054 Total Dividend Requirements 32,018 32,018 96,054 96,054 Net Income (Loss) - Common Stockholders $ (115,042) $ (97,268) $ 132,770 $ (487) 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 (Loss) per Share $ (0.12) $ (0.10) $ 0.14 $ (0.00) Diluted (Anti-Diluted) Earnings (Loss) per Share $ (0.12) $ (0.10) $ 0.11 $ (0.00) Cumulative Preferred Stock dividends in arrears at March 31, 2023 and 2022 totaled $8,813,292 and $8,685,220, respectively. Total dividends in arrears, on a per share basis, consist of the following: Nine Months Ended March 31, 2023 2022 6% Convertible: Series A $ 19 $ 19 Series B $ 19 $ 19 5% Convertible: Series A $ 74 $ 73 Series B $ 74 $ 73 The 6% convertible prior cumulative preferred stock may, upon thirty days prior notice, be redeemed by the Corporation at $5.25 per share plus unpaid accrued dividends to date of redemption. In the event of voluntary liquidation, holders of this stock are entitled to receive $5.25 per share plus accrued dividends. It may be exchanged for common stock at the option of the shareholders in the ratio of four common shares for one share of Series A and 3.75 common shares for one share of Series B. NOTE 2 EARNINGS PER SHARE (cont.) The Company has the privilege of redemption of 5% convertible cumulative preferred stock at $21 per share plus unpaid accrued dividends. In the event of voluntary or involuntary liquidation, holders of this stock are entitled to receive $20 per share plus unpaid accrued dividends. It may be exchanged for common stock at the option of the shareholders, in the ratio of 3.795 common shares for one of 5% convertible preferred stock. |
NOTE PAYABLE AND LINES-OF-CREDI
NOTE PAYABLE AND LINES-OF-CREDIT | 9 Months Ended |
Mar. 31, 2023 | |
NOTE PAYABLE AND LINES-OF-CREDIT | |
NOTE PAYABLE AND LINES-OF-CREDIT | NOTE 3 NOTE PAYABLE AND LINES-OF-CREDIT The Company’s debt consists of: March 31, June 30, Payee Terms 2023 2022 Nodaway Valley Bank $500,000 line-of-credit agreement expiring on January 4, 2024, 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. $ — $ — Nodaway Valley Bank $350,000 line-of-credit agreement expired on January 4, 2023, 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. — 120,000 Ford Motor Credit Company, LLC $1,126 monthly payments, interest of 2.90%; final payment due November 2026, secured by a vehicle 46,936 — Total 46,936 120,000 Less Current Portion 12,311 120,000 Long-Term Portion $ 34,625 $ — Future minimum payments for the twelve months ending March 31 are: March 31, Amount 2024 $ 12,311 2025 12,672 2026 13,045 2027 8,908 Total $ 46,936 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Mar. 31, 2023 | |
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 |
SUPPLEMENTAL DISCLOSURES OF CAS
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | 9 Months Ended |
Mar. 31, 2023 | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | NOTE 5 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Nine Months Ended March 31, 2023 2022 Supplemental Cash Flow Information Interest paid $ 7,348 $ 4,057 Right-of-use asset obtained in exchange for modification of operating lease liability $ 279,072 $ — Notes Payable obligation incurred for equipment $ 50,900 $ — |
DISCLOSURES ABOUT FAIR VALUE OF
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Mar. 31, 2023 | |
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, payables, note payable and lines-of-credit. There are no significant differences between the carrying value and fair value of any of these financial instruments. |
COMMITMENTS, CONTINGENCIES AND
COMMITMENTS, CONTINGENCIES AND RELATED PARTY TRANSACTIONS | 9 Months Ended |
Mar. 31, 2023 | |
COMMITMENTS, CONTINGENCIES AND RELATED PARTY TRANSACTIONS | |
COMMITMENTS, CONTINGENCIES AND RELATED PARTY TRANSACTIONS | NOTE 7 COMMITMENT, CONTINGENCIES, AND RELATED PARTY TRANSACTIONS The Company leases its office and manufacturing facility located in St. Joseph, Missouri under an operating lease from an entity that is partially owned by the son of the Chief Executive Officer of the Company. The lease term is from February 1, 2005 through March 31, 2025 with an option to extend for an additional term of five years. During the period ended March 31, 2023, the Company determined the exercise of the renewal option is reasonably assured and has therefore remeasured the right-of-use asset and lease liability to include the additional five years at the current rate so that the new term expires on March 31, 2030. The lease currently requires payments of $6,500 per month, as noted the Company does not believe the payments in the renewal period will vary significantly from this current amount. Operating lease right-of-use 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 7 years and the present value of the lease payments is calculated using the Company’s estimated incremental borrowing rate of 7.6% as of the remeasurement date. Operating lease expense is recognized on a straight-line basis over the lease term. NOTE 7 COMMITMENT, CONTINGENCIES, AND RELATED PARTY TRANSACTIONS (cont.) 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 lease 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 $58,500 for the nine months ended March 31, 2023, of which, $53,673 is included in cost of sales and $4,827 is included in general and administrative expenses. Minimum annual payments required under existing operating lease liabilities that have initial or remaining noncancelable terms in excess of one year as of March 31, 2023 are as follows: Twelve Months Ending March 31, Amount 2024 $ 78,000 2025 78,000 2026 78,000 2027 78,000 2028 78,000 Thereafter 156,000 Total Lease Payments 546,000 Less: Imputed Interest 120,909 Total Lease Liabilities $ 425,091 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Mar. 31, 2023 | |
SIGNIFICANT ACCOUNTING POLICIES | |
General | General The condensed consolidated balance sheet of Chase General Corporation (hereinafter referred to as Chase, the Company, we, our, and us) at June 30, 2022 has been taken from audited consolidated financial statements at that date and condensed. The condensed consolidated financial statements as of and for the three and nine months ended March 31, 2023 and for the three and nine months ended March 31, 2022 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, 2022. The results of operations for the three and nine months ended March 31, 2023 and cash flows for the nine months ended March 31, 2023 are not necessarily indicative of the results for the entire fiscal year ending June 30, 2023. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to fairly present financial position, results of operations, and cash flows for the periods have been included. |
Revenue Recognition | Revenue Recognition The majority of our revenue is derived by fulfilling customer orders for the purchase of our products, including 1) a candy bar marketed under the trade name “Cherry Mash” and 2) coconut, peanut, chocolate, and fudge confectioneries. The Company recognizes revenue at the point in time that control of the ordered product(s) is transferred to the customer, which is typically upon shipment to the customer. Shipping and handling costs incurred to ship product to the customer are recorded within cost of sales. Amounts billed and due from our customers are classified as trade receivables on the consolidated balance sheet and require payment on a short-term basis. Generally, individual orders from customers are accounted for as a single performance obligation. Revenue is measured as the amount of consideration we expect to receive in exchange for fulfilling product orders. Sales, value added, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. The amount of consideration the Company expects to receive and revenue the Company recognizes includes estimates of variable consideration, including costs for trade promotional programs, customer incentives, and allowances and discounts associated with aged or potentially unsaleable products. These estimates are based upon our analysis of the programs offered, historical trends, and expectations regarding customer and consumer participation, sales and payment trends and our experience with payment patterns associated with similar programs offered in the past. The Company reviews and updates these estimates regularly and the impact of any adjustments are recognized in the period the adjustments are identified. NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (cont.) Revenue Recognition (cont.) The majority of the Company’s products are confectionery and confectionery-based and, therefore, exhibit similar economic characteristics, such that they are based on similar ingredients and are marketed and sold through the same channels to the same customers. The Company operates two divisions, Chase Candy Products and Seasonal Candy Products. Chase Candy Products involve production and sale of a candy bar marketed under the trade name “Cherry Mash”. The Seasonal Candy Products involve production and sale of coconut, peanut, chocolate, and fudge confectioneries. Both divisions share a common labor force and utilize the same basic equipment and raw materials. Management considers these two divisions as one reportable segment. The various divisions of revenue are as follows: For the three months ended March 31, 2023 2022 Sales - Chase Candy $ 496,012 $ 552,692 Sales - Seasonal Candy 11,906 12,343 Sales $ 507,918 $ 565,035 For the nine months ended March 31, 2023 2022 Sales - Chase Candy $ 1,465,662 $ 1,458,699 Sales - Seasonal Candy 1,484,477 1,204,644 Sales $ 2,950,139 $ 2,663,343 |
Recently Issued Pronouncements | 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. |
Subsequent Events | Subsequent Events No events have occurred subsequent to March 31, 2023, through the date of filing this form, that would require disclosure in this Form 10-Q or would be required to be recognized in the condensed consolidated financial statements as of or for the nine month period ended March 31, 2023 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Mar. 31, 2023 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of divisions of revenue | For the three months ended March 31, 2023 2022 Sales - Chase Candy $ 496,012 $ 552,692 Sales - Seasonal Candy 11,906 12,343 Sales $ 507,918 $ 565,035 For the nine months ended March 31, 2023 2022 Sales - Chase Candy $ 1,465,662 $ 1,458,699 Sales - Seasonal Candy 1,484,477 1,204,644 Sales $ 2,950,139 $ 2,663,343 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Mar. 31, 2023 | |
EARNINGS PER SHARE | |
Schedule of earnings per share computed on the weighted average of outstanding common shares | Three Months Ended Nine Months Ended March 31st March 31, 2023 2022 2023 2022 Net Income (Loss) $ (83,024) $ (65,250) $ 228,824 $ 95,567 Preferred Dividend Requirements: 6% Prior Cumulative Preferred, $5 Par Value 15,000 15,000 45,000 45,000 5% Convertible Cumulative Preferred, $20 Par Value 17,018 17,018 51,054 51,054 Total Dividend Requirements 32,018 32,018 96,054 96,054 Net Income (Loss) - Common Stockholders $ (115,042) $ (97,268) $ 132,770 $ (487) 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 (Loss) per Share $ (0.12) $ (0.10) $ 0.14 $ (0.00) Diluted (Anti-Diluted) Earnings (Loss) per Share $ (0.12) $ (0.10) $ 0.11 $ (0.00) |
Schedule of total dividends in arrears, on a per share basis | Nine Months Ended March 31, 2023 2022 6% Convertible: Series A $ 19 $ 19 Series B $ 19 $ 19 5% Convertible: Series A $ 74 $ 73 Series B $ 74 $ 73 |
NOTE PAYABLE AND LINES-OF-CRE_2
NOTE PAYABLE AND LINES-OF-CREDIT (Tables) | 9 Months Ended |
Mar. 31, 2023 | |
NOTE PAYABLE AND LINES-OF-CREDIT | |
Schedule of debt consists of lines-of -credit | March 31, June 30, Payee Terms 2023 2022 Nodaway Valley Bank $500,000 line-of-credit agreement expiring on January 4, 2024, 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. $ — $ — Nodaway Valley Bank $350,000 line-of-credit agreement expired on January 4, 2023, 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. — 120,000 Ford Motor Credit Company, LLC $1,126 monthly payments, interest of 2.90%; final payment due November 2026, secured by a vehicle 46,936 — Total 46,936 120,000 Less Current Portion 12,311 120,000 Long-Term Portion $ 34,625 $ — |
Schedule of future minimum payments of long term debt | March 31, Amount 2024 $ 12,311 2025 12,672 2026 13,045 2027 8,908 Total $ 46,936 |
SUPPLEMENTAL DISCLOSURES OF C_2
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION (Tables) | 9 Months Ended |
Mar. 31, 2023 | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |
Schedule of supplemental disclosures of cash flow information | Nine Months Ended March 31, 2023 2022 Supplemental Cash Flow Information Interest paid $ 7,348 $ 4,057 Right-of-use asset obtained in exchange for modification of operating lease liability $ 279,072 $ — Notes Payable obligation incurred for equipment $ 50,900 $ — |
COMMITMENTS, CONTINGENCIES AN_2
COMMITMENTS, CONTINGENCIES AND RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Mar. 31, 2023 | |
COMMITMENTS, CONTINGENCIES AND RELATED PARTY TRANSACTIONS | |
Schedule of annual payments | Twelve Months Ending March 31, Amount 2024 $ 78,000 2025 78,000 2026 78,000 2027 78,000 2028 78,000 Thereafter 156,000 Total Lease Payments 546,000 Less: Imputed Interest 120,909 Total Lease Liabilities $ 425,091 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 507,918 | $ 565,035 | $ 2,950,139 | $ 2,663,343 |
Sales - Chase Candy | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 496,012 | 552,692 | 1,465,662 | 1,458,699 |
Sales - Seasonal Candy | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 11,906 | $ 12,343 | $ 1,484,477 | $ 1,204,644 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Additional information (Details) | 9 Months Ended |
Mar. 31, 2023 division segment | |
SIGNIFICANT ACCOUNTING POLICIES | |
Number of product divisions | division | 2 |
Number of reportable segment | segment | 1 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Class of Stock [Line Items] | ||||
Net Income | $ (83,024) | $ (65,250) | $ 228,824 | $ 95,567 |
Preferred Dividend Requirements: | ||||
Total Dividend Requirements | 32,018 | 32,018 | 96,054 | 96,054 |
Net Income (Loss) - Common Stockholders | $ (115,042) | $ (97,268) | $ 132,770 | $ (487) |
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 | $ (0.12) | $ (0.10) | $ 0.14 | $ 0 |
Diluted Earnings per Share | $ (0.12) | $ (0.10) | $ 0.11 | $ 0 |
6% Prior Cumulative Preferred, $5 par value | ||||
Preferred Dividend Requirements: | ||||
Total Dividend Requirements | $ 15,000 | $ 15,000 | $ 45,000 | $ 45,000 |
5% Convertible Cumulative Preferred, $20 Par Value | ||||
Preferred Dividend Requirements: | ||||
Total Dividend Requirements | $ 17,018 | $ 17,018 | $ 51,054 | $ 51,054 |
EARNINGS PER SHARE (Parenthetic
EARNINGS PER SHARE (Parenthetical) (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
6% Prior Cumulative Preferred, $5 par value | ||||
Class of Stock [Line Items] | ||||
Stated percentage of preferred stock | 6% | 6% | 6% | 6% |
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% | 5% | 5% | 5% |
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 | 9 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Prior Cumulative Preferred Stock - Series A | ||
Class of Stock [Line Items] | ||
Total dividends in arrears | $ 19 | $ 19 |
Prior Cumulative Preferred Stock - Series B | ||
Class of Stock [Line Items] | ||
Total dividends in arrears | 19 | 19 |
Cumulative Preferred Stock - Series A | ||
Class of Stock [Line Items] | ||
Total dividends in arrears | 74 | 73 |
Cumulative Preferred Stock - Series B | ||
Class of Stock [Line Items] | ||
Total dividends in arrears | $ 74 | $ 73 |
EARNINGS PER SHARE - Additional
EARNINGS PER SHARE - Additional information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Class of Stock [Line Items] | ||||
Total cumulative preferred stock dividends in arrears | $ 8,813,292 | $ 8,685,220 | ||
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 | ||
Stated percentage of preferred stock | 6% | 6% | 6% | 6% |
Prior Cumulative Preferred Stock - Series A | ||||
Class of Stock [Line Items] | ||||
Number of common stock exchanged for each preferred stock held | 1 | |||
Number of common stock exchanged for each preferred stock held | 4 | |||
Prior Cumulative Preferred Stock - Series B | ||||
Class of Stock [Line Items] | ||||
Number of common stock exchanged for each preferred stock held | 1 | |||
Number of common stock exchanged for each preferred stock held | 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 | 1 | |||
Number of common stock exchanged for each preferred stock held | 3.795 | |||
Stated percentage of preferred stock | 5% | 5% | 5% | 5% |
NOTE PAYABLE AND LINES-OF-CRE_3
NOTE PAYABLE AND LINES-OF-CREDIT - Debt (Details) - USD ($) | Mar. 31, 2023 | Jun. 30, 2022 |
Debt Instrument [Line Items] | ||
Less Current Portion | $ 12,311 | $ 120,000 |
Long-Term Portion | 34,625 | |
Long-Term Line of Credit [Abstract] | ||
Total | 46,936 | 120,000 |
Less Current Portion | 12,311 | 120,000 |
Long-Term Portion | 34,625 | |
Nodaway Valley Bank Dollars 350000 Line Of Credit Agreement Expired On 2023 January Four With Variable Interest Rate At Prime But Not Less Than Five Percent [Member] | ||
Long-Term Line of Credit [Abstract] | ||
Total | $ 120,000 | |
Ford Motor Credit Company, LLC $1,126 monthly payments, interest of 2.90%; final payment due November 2026, secured by a vehicle | ||
Debt Instrument [Line Items] | ||
Total | $ 46,936 |
NOTE PAYABLE AND LINES-OF-CRE_4
NOTE PAYABLE AND LINES-OF-CREDIT - Debt (Narratives) (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Jun. 30, 2022 | |
Nodaway Valley Bank Dollars 350000 Line Of Credit Agreement Expired On 2023 January Four With Variable Interest Rate At Prime But Not Less Than Five Percent [Member] | ||
Debt Instrument [Line Items] | ||
Line-of-credit agreement, amount | $ 350,000 | $ 350,000 |
Line of Credit Facility, Expiration date | Jan. 04, 2023 | Jan. 04, 2023 |
Interest rate | 5% | 5% |
Nodaway Valley Bank $500,000 line-of-credit agreement expiring on January 4, 2024, 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 | $ 500,000 | $ 500,000 |
Line of Credit Facility, Expiration date | Jan. 04, 2024 | Jan. 04, 2024 |
Interest rate | 5% | 5% |
Ford Motor Credit Company, LLC $1,126 monthly payments, interest of 2.90%; final payment due November 2026, secured by a vehicle | ||
Debt Instrument [Line Items] | ||
Line-of-credit agreement, amount | $ 1,126 | |
Interest rate | 2.90% |
NOTE PAYABLE AND LINES-OF-CRE_5
NOTE PAYABLE AND LINES-OF-CREDIT - Debt Minimum Payments (Details) | Mar. 31, 2023 USD ($) |
NOTE PAYABLE AND LINES-OF-CREDIT | |
2024 | $ 12,311 |
2025 | 12,672 |
2026 | 13,045 |
2027 | 8,908 |
Total | $ 46,936 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 6 Months Ended |
Mar. 31, 2023 USD ($) | Mar. 31, 2023 USD ($) | |
INCOME TAXES | ||
Provision for income tax | $ 0 | $ 0 |
Unrecognized Tax Benefits | 0 | 0 |
Accruals for interest or penalties | $ 0 | $ 0 |
SUPPLEMENTAL DISCLOSURES OF C_3
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION (Details) - USD ($) | 9 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash Paid for: | ||
Interest paid | $ 7,348 | $ 4,057 |
Right-of-use asset obtained in exchange for modification of operating lease liability | 279,072 | |
Notes Payable obligation incurred for equipment | $ 50,900 |
COMMITMENTS, CONTINGENCIES AN_3
COMMITMENTS, CONTINGENCIES AND RELATED PARTY TRANSACTIONS - Future minimum lease payments (Details) | Mar. 31, 2023 USD ($) |
COMMITMENTS, CONTINGENCIES AND RELATED PARTY TRANSACTIONS | |
2024 | $ 78,000 |
2025 | 78,000 |
2026 | 78,000 |
2027 | 78,000 |
2028 | 78,000 |
Thereafter | 156,000 |
Total Lease Payments | 546,000 |
Less: Imputed Interest | 120,909 |
Total Lease Liabilities | $ 425,091 |
COMMITMENTS, CONTINGENCIES AN_4
COMMITMENTS, CONTINGENCIES AND RELATED PARTY TRANSACTIONS - Additional Information (Details) | 9 Months Ended |
Mar. 31, 2023 USD ($) | |
Long-term Purchase Commitment [Line Items] | |
Additional lease period | 5 years |
Option to extend | true |
Lease payments per month | $ 6,500 |
Lease, Practical Expedient, Lessor Single Lease Component [true false] | true |
Operating lease remaining term | 7 years |
Estimated incremental borrowing rate | 7.60% |
Operating lease liabilities | $ 58,500 |
Cost of sales | |
Long-term Purchase Commitment [Line Items] | |
Operating lease liabilities | 53,673 |
General and administrative expenses | |
Long-term Purchase Commitment [Line Items] | |
Operating lease liabilities | $ 4,827 |