Chase General Corp – ‘10-K405’ for 6/30/96

As of:  Thursday, 10/10/96   ·   For:  6/30/96   ·   Accession #:  927025-96-77   ·   File #:  2-05916

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Annual Report — [x] Reg. S-K Item 405   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K405     Annual Report -- [x] Reg. S-K Item 405                41    136K 
 2: EX-3.1      Articles of Incorporation/Organization or By-Laws      4     12K 
 3: EX-3.2      Articles of Incorporation/Organization or By-Laws      1      6K 
 4: EX-27       Financial Data Schedule (Pre-XBRL)                     1      8K 

10-K405   —   Annual Report — [x] Reg. S-K Item 405
Document Table of Contents

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION              
WASHINGTON, D.C. 20549              
FORM 10-K               

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF              
THE SECURITIES EXCHANGE ACT OF 1934               

For the fiscal year ended June 30, 1996                                         

Commission File Number 2-5916                                                   

CHASE GENERAL CORPORATION               
(Exact name of registrant as specified in its charter)              

Missouri                            36-2667734          
(State of Incorporation)                (I.R.S. Employer              
                           (Identification Number)

3600 Leonard Road, St. Joseph, Missouri 64503               
(Address of principal executive offices)              

Registrants' telephone number, including area code:  (816)                      
279-1625                                                                        

Securities registered pursuant to Section 12(b) of the Act:  None               

Securities registered pursuant to Section 12(g) of the Act:  None               

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

Indicate by check mark if disclosure of delinquent filers                       
pursuant to Item 405 of Regulation S-K is not contained herein,                 
and will not be contained, to the best of registrant's knowledge,               
in definitive proxy or information statements incorporated by                   
reference in Part III of this Form 10-K or any amendment to this                
Form 10-K.  X                                                                   

State the aggregate market value of the voting stock held by                    
non-affiliates of registrant:  Voting stock not actively traded.                
Therefore, market value of stock unknown as of 60 days prior to                 
the date of this filing.                                                        

Indicate the number of shares outstanding of each of the                        
registrants' classes of common stock as of the latest practicable               
date:  969,834 (one class with $1 par value) as of June 30, 1996.               

Location in this filing where exhibit index is located :   37                   

Total number of pages included in this filing:   46                             

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PART I              

ITEM 1    BUSINESS                                                              

(a)  General development of business                                  

(1)  Narrative history of business                          

Chase General Corporation was incorporated        
November 6, 1944 for the purpose of manufacturing confectionery                 
products.  In 1970 Chase General Corporation acquired 100%                      
interest in its wholly-owned subsidiary, Dye Candy Company.                     
(Chase General Corporation and Dye Candy Company are sometimes                  
referred herein as "the Company"). This subsidiary is the main                  
operating company for this reporting entity. There were no                      
material acquisitions, dispositions, new developments, or changes               
in conducting business during the past five fiscal years.                       
However, as of June 30, 1987, the working capital of the Company                
became impaired due to the maturity of $696,000 of notes payable.               
During the fiscal year end 1991 a portion of the notes were paid                
in full and the remaining notes were extended to December 20,                   
1994.  Negotiation of a second extension of the notes began                     
during fiscal year ended 1995.  An extension to December 20, 2002               
was unanimously accepted December 20, 1995 with the agreement                   
that this will be the final extension.  Refer to "Management's                  
Discussion and Analysis of Financial Condition and Results of                   
Operations" contained in Part II of this filing for further                     
information.                                                                    

(2)  Not applicable.                                        

(b)  Segment information                                              

The products of the Chase Candy Division and the Poe        
Candy Division of Dye Candy Company are sold to the same types of               
customers in the same geographical areas.  In addition, both                    
divisions share a common labor force and utilize the same basic                 
equipment and raw materials in production.  Therefore, due to the               
similarity in the marketing and manufacturing of the products,                  
segment reporting for these divisions is not required to be                     
disclosed in accordance with FASB 14.                                           

(c)  Narrative description of businesses                              

(1)  Description of business done and intended to be        
done by dominant single industry                                                

(i)  The principal products produced and methods  
of distribution are as follows:                                                 

(Continued)               

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ITEM 1    BUSINESS (CONTINUED)                                                  

 Chase Candy Division of Dye Candy Company
produces a candy bar under the trade name of "Cherry MashR".  The               
bar is distributed in four case sizes:                                          

(1)  60 count pack                      
(2)  24 packs of 3 bars per pack        
(3)  12 boxes of 24 bars per box        
(4)  192 count shipper box              

In addition to the regular size bar, a  
"mini-mash" is distributed in four case sizes:                                  

(1)  24 - 12 oz. bags                   
(2)  6 jars - 60 bars per jar           
(3)  28 # wrapped bars                  
(4)  22 # unwrapped bars                

The bars are sold primarily to wholesale
candy and tobacco jobbing houses, grocery accounts, and vendors.                
"Cherry MashR" bars are marketed in the Midwest region of the                   
United States.  For the years ended June 30, 1996, 1995, and                    
1994, this division accounted for 52%, 51%, and 48%,                            
respectively,  of the consolidated revenue of Dye Candy Company.                

Poe Candy Division of Dye Candy Company 
produces coconut, peanut, chocolate, and fudge confectioneries.                 
These products are distributed in bulk or packaged.  Principal                  
products include:                                                               

    (1)  Coconut Bon-Bons    (6)  Peanut brittle
   (2)  Coconut Stacks      (7)  Coconut cubes
     (3)  Home Style Poe      (8)  Peanut clusters
Fudge                     
    (4)  Peco Flake          (9)  Champion Creme
                         Drops
   (5)  Peanut Squares      (10) Jelly Candies

   The Poe line is sold primarily on a Midwest
regional basis to national syndicate accounts, repackers, and                   
grocery accounts.  For the years ended June 30, 1996, 1995, and                 
1994, this division accounted for 48%, 49%, and 52%,                            
respectively, of the consolidated revenue of Dye Candy Company.                 

(ii)      Not applicable.                         

(iii)     Raw materials and packaging materials   
are produced on a national basis with products coming from most                 
of the states of the United States.  Raw materials and packaging                
materials are generally widely available, depending, of course,                 
on common market influences.                                                    

(Continued)               

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ITEM 1    BUSINESS (CONTINUED)                                                  

(iv)      The largest single revenue producing    
product, the "Cherry MashR" bar is protected by a trademark                     
registered with the United States Government Patents Office.                    
Management considers this trademark very important to the                       
Company. The trademark was renewed during the fiscal year ended                 
June 30, 1985.                                                                  

(v)       The Company is a seasonal business      
whereby the largest volume of sales occur in the spring and fall                
of each year.  The net income per quarter of the Company varies                 
in direct proportion to the seasonal sales volume.                              

(vi)      Due to the seasonal nature of the       
business, there is a heavier demand on working capital in the                   
summer and winter months of the year when the Company is building               
its inventories in anticipation of fall and spring sales.  The                  
fluctuation of demand on working capital due to the seasonal                    
nature of the business is common to the confectionery industry.                 
If necessary, the Company has the ability to borrow short term                  
funds in early fall to finance operations prior to receiving cash               
collections from fall sales.  The Company occasionally offers                   
extended payment terms of up to sixty days.  Since this practice                
is infrequent, the effect on working capital is minimal.                        

(vii)     No single customer accounted for 10% or 
more of the gross sales for the fiscal years ended June 30, 1994.               
For the year ending June 30, 1996 and 1995, Associated Wholesale                
Grocers of Springfield, MO, accounted for 10.79% and 11.88% of                  
gross sales, respectively.  The loss of this customer would not                 
have an adverse effect on the Company as customer purchases and                 
distributes to retail outlets and these outlets would continue to               
demand products offered by Dye Candy Company.                                   

(viii)    Prompt, efficient service are traits    
demanded in the confectionery industry resulting in a continual                 
low volume of back-orders.  Therefore, at no time during the year               
does the Company have a significant amount of back-orders.                      

(ix)      Not applicable.                         

(Continued)               

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ITEM 1    BUSINESS (CONTINUED)                                                  

(x)       The confectionery market for the type of
product produced by the divisions of Dye Candy Company is very                  
competitive and quality minded.  The confectionery (candy)                      
industry in which the divisions operate is highly competitive                   
with many small companies and, within certain specialized areas,                
a few competitors dominate.  In the United States, the dominant                 
competitors in the coconut candy industry are Bradley Candy                     
Company, Crown Candy Company, Vermico Candy Company, and the Poe                
Division of Dye Candy Company with approximately 70% of the                     
market share among them.  In the United States, Sophie Mae and                  
Old Dominion have approximately 80% of the market share of the                  
peanut candy business in which the Poe Division operates.  Dye                  
Candy Company sells approximately 90% of its products in the                    
Midwest region with seasonal orders being shipped to the Southern               
and Eastern regions of the United States.  Except for the coconut               
candy industry, Dye Candy Company is not a dominant competitor in               
any of the candy industries in which it competes.  Principal                    
methods of  competition the Company uses include quality of                     
product, price, reduced transportation costs due to central                     
location, and service.  The Company's competitive position is                   
positively influenced by labor costs being lower than industry                  
average.  Chase General Corporation is firmly established in the                
confectionery market and through its operating divisions has many               
years' experience associated with its name.                                     

(xi)      Not applicable.                         

(xii)     To the best of management's knowledge,  
the Company is presently in compliance with all environmental                   
laws and regulations and does not anticipate any future                         
expenditures in this regard.                                                    

(xiii)    The Company employs approximately 25    
full time personnel year round which expands to approximately 50                
full time personnel during the two busy production seasons.                     

(d)  Foreign and domestic operations and export sales       

The Company has no foreign operations or export   
sales.  In addition, all domestic sales are primarily in the                    
Midwest region of the United States.                                            

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ITEM 2    PROPERTIES                                                            

The registrant operates out of two buildings consisting of            
the following:                                                                  

Chase and Poe Warehouse - This building located in St.                
Joseph, Missouri is owned by Dye Candy Company, a wholly-owned                  
subsidiary of the registrant.  The facilities are currently                     
devoted entirely to the storage of supplies, and the warehousing                
and shipping of candy products.  This warehouse consists of a                   
sixty-five year old building which is in fair condition and is                  
adequate to meet present requirements.  The warehouse has                       
approximately 15,000 square feet.                                               

Chase General Office and Dye Candy Company Operating Plant -          
The building housing the office and plant is located in St.                     
Joseph, Missouri, and was originally owned by Chase Building                    
Corporation, a wholly-owned subsidiary of Dye Candy Company.  In                
March, 1975, the subsidiary was liquidated by Dye Candy Company.                
Subsequently, the Company sold this facility.  The property was                 
leased from the purchaser in March, 1975.  Refer to Note 3,                     
"Notes to Financial Statements," for terms of the lease.  The                   
building contains the general offices of Chase General                          
Corporation, Dye Candy Company, and its divisions.  The                         
production plant of Dye Candy Company occupies the remainder of                 
the building.  The building was acquired new in 1964 and was                    
specifically designed for the type of operations conducted by the               
registrant.  The facility is adequate to meet present                           
requirements.  The operating plant is approximately 20,000 square               
feet and the office is approximately 2,000 square feet.  The                    
Company renegotiated the original lease on this building which                  
expired March 31, 1995.  The terms of the new lease began April                 
1, 1995 and continues for ten years.                                            

ITEM 3    LEGAL PROCEEDINGS                                                     

The Company is not, and has not been, a party in any                  
material pending legal proceedings, other than ordinary                         
litigation incidental to its business, during the fiscal year                   
ended June 30, 1996, nor are any such proceedings contemplated.                 

ITEM 4    RESULTS OF VOTES OF SECURITY HOLDERS                                  

No matters were submitted to a vote of security holders of            
the registrant during the fourth quarter of the fiscal year ended               
June 30, 1996.                                                                  

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PART II         

ITEM 5    MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED                  
STOCKHOLDER MATTERS                                                             

(a)  Market information                                               

There is no established public trading market for the       
common stock (par value $1 per share) of the Company.                           

(b)  Approximate number of security holders                           

As of June 30, 1996, the latest practicable date, the       
approximate number of record holders of common stock was 1,439,                 
including individual participants in security listings.                         

(c)  Dividends                                                        

(1)  Dividend history and restrictions                      

No dividends have been paid during the past three 
fiscal years.  Refer to Note 1, "Notes to Financial Statements"                 
for dividend restrictions.                                                      

(2)  Dividend policy                                        

There is no set policy on the payment of dividends
due to the financial condition of the Company and other factors.                
It is not anticipated that cash dividends will be paid in the                   
foreseeable future.  See Item 5(c) (1) for further information.                 

ITEM 6    SELECTED FINANCIAL DATA                                               

(a)  Last five years                                                  

                                                                    [Download Table]
                                                                           
                                                                               
                      06-30-96    06-30-95    06-30-94    06-30-93    06-30-92 
                                                                               
(i) Net sales or                                                               
    operating                                                                  
    revenue          $2,316,031  $2,235,656  $2,476,259  $2,531,740  $2,603,469

(ii) Income from                                                               
     continuing                                                                
     operations      $   63,703  $   60,146   $  25,421  $   95,015  $  129,546

(iii)Income                                                                    
     (loss) from                                                               
     continuing                                                                
     operations per                                                            
     common share*   $    (.07)  $    (.07)   $   (.11)  $    (.03)  $      -  

(iv)Total assets     $  815,954  $  797,909   $ 784,506  $  737,169  $  710,085

(v) Long-term                                                                  
    debt             $  242,980  $        -   $       -  $  302,802  $  320,307

(vi)Cash dividend                                                              
    declared                                                                   
    per common                                                                 
    share            $        -  $        -     $     -  $        -  $        -

                                                                        

(b)  No additional years necessary to keep the summary from           
being misleading.                                                               

* Refer to Note 6, "Notes to Financial Statements" for                          
computation of income (loss) from continuing operations per                     
common share.                                                                   

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ITEM 7    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                     
CONDITION AND RESULTS OF OPERATIONS                                             

(a & b)   Liquidity and capital resources                             

Positive cash flows from operating activities were          
generated for fiscal years ended June 30, 1996, 1995 and 1994 in                
the amounts of $104,944, $116,893 and $79,135, respectively.                    

In order to preserve cash for the fall production           
season, the Company continues to invest in U.S. Treasury                        
obligations.  The Company redeemed its June 30, 1994 obligation                 
in early fall of 1994.  However, due to the timing of a new                     
promotional product to be released in early fall 1995, the U.S.                 
Treasury obligation purchased December 22, 1994 was redeemed                    
immediately prior to June 30, 1995.  Due to a capital asset                     
purchase in June 1996, the U.S. Treasury obligation purchased                   
November 24, 1995 was redeemed on May 23, 1996.                                 

Inventory balance of raw materials decreased from June      
30, 1995 to June  30, 1996.  This is due to timing of product                   
purchases and commitments to purchase products at different times               
during the fiscal year.  At June 30, 1995 year end there were                   
purchase commitments totaling $160,600 to purchase raw materials                
from three suppliers.  At June 30, 1996, there were purchase                    
commitments totaling $269,000 to purchase raw materials from four               
suppliers.  This accounted for a decrease of raw materials at                   
June 30, 1996.  The majority of these commitments have now been                 
delivered to the Company and are in inventory ready for                         
processing during the 1996 fall season.  Inventory balances of                  
packaging materials increased from June 30, 1995 to June 30,                    
1996.  There was an increase in packaging materials at June 30,                 
1996, due to timing of purchase of packaging supplies.  In the                  
prior year certain wrapping materials for Cherry Mash products                  
were at a low volume whereas at June 30, 1996 these products had                
been restored.  Packaging materials are purchased in large                      
volumes and carried for several years due to the high cost to                   
suppliers to cut dies and print materials.  Finished goods                      
inventory remained comparable to prior year as did goods in                     
process.                                                                        

The Company continues to write off equipment that is no     
longer useful to the operations of the Company.  These write offs               
have been immaterial over the past three years.  The Company also               
continues to replace old equipment on a yearly basis in order to                
streamline operations.  However, due to cash flow needs in other                
areas, the Company has not been able to update the equipment at                 
any significant level.  In June 1996, the Company purchased                     
$69,443 of new equipment.  The equipment was not in operation at                
June 30, 1996 but is expected to be ready for production in early               
fall of 1996.  The equipment consists of a wrapper machine and                  
metal detector.  Any additional cost to have the equipment                      
completely operational will be minimal.                                         

(Continued)               

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ITEM 7    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                     
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)                                 

Of the original $630,000 Series B notes payable,            
$252,656 remain outstanding at June 30, 1996.  The Company                      
received approval effective December 20, 1995 to extend the notes               
to December 20, 2002 at the current 6% rate of interest.  Of the                
$252,656 amount outstanding $9,676 has been classified as a                     
current liability and $242,980 is classified as long-term at June               
30, 1996.                                                                       

The Company's lease on its manufacturing facility           
expired March 31, 1995.  The lease was renewed effective April 1,               
1995 for a period of 10 years at $2,955 per month.                              

(c)  Results of Operations                                            

Net sales for year ending June 30, 1994 decreased 2.19%     
from 1993 and net sales for the year ending June 30, 1995                       
decreased 9.71% from 1994.  The depressed economy due to the 1993               
floods adversely affected the Company since the majority of the                 
Company's market is in the Midwest area.  The Company also lost a               
customer in 1994 who accounted for 2.7% of the 1993 net sales.                  
This customer had requested a special size product which the                    
Company felt was not feasible or profitable to produce based upon               
the amount of orders the customer would give the Company.                       
Therefore, the customer was lost in the entirety.  During year                  
ending June 30, 1995 several small customers discontinued                       
operations.  This along with the customer loss in 1994 were                     
contributing factors in the 1995 decrease in net sales.  However,               
during the year ending June 30, 1996 net sales increased 3.60%                  
over 1995.  This increase was attributed to an increase in                      
promotion of the Cherry Mash line of products, and an aggressive                
sales approach to existing customers. It is anticipated that the                
increased promotion of this product line will have a continued                  
positive impact on future sales.                                                

For the year ending June 30, 1996, the Company realized     
a .26% decrease in cost of sales compared to fiscal 1995.  This                 
decrease was due to tighter inventory controls and consistent                   
pricing from suppliers.  Cost of sales decreased 2.84% from June                
30, 1994 to June 30, 1995 due primarily to a decrease in material               
cost and labor expense.  Also there was a reduction of workmen's                
compensation insurance expense which was attributed to a change                 
in insurance carriers and the hiring of part-time workers through               
a temporary employment agency.  Cost of sales for year ending                   
June 30, 1994 increased 3.88% compared to fiscal 1993 due                       
primarily to increased supervision salaries and increased                       
production incentives provided to the plant labor force.                        

(Continued)               

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ITEM 7    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                     
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)                                 

It is estimated that gross profit will increase due to      
an increase in promotion and due to an increase in sales price of               
the Cherry Mash line of candies.  It does not appear that the                   
price increase will affect sales volume of the product as it has                
established its market in prior years.  Also new products                       
introduced in prior years can be expected to be offered to the                  
market at a higher profit margin since acceptance has now been                  
obtained in the market place.                                                   

Selling expenses and general and administrative             
expenses have remained constant for the three years included in                 
the current fiscal reporting period.  Interest expense continues                
to decline due to a reduction in outstanding balances for notes                 
payable.                                                                        

In order to maintain funds to finance operations and        
meet debt obligations, it is the intention of management to                     
continue its efforts to expand the present market area and                      
increase sales to its customers. Management also intends to                     
continue tight control on all expenditures.                                     

There has been no material impact from inflation and        
changing prices on net sales and revenues or on income from                     
continuing operations for the last three fiscal years.                          

The effects of the Tax Reform Act of 1986 on the            
Company's liquidity  and results of operations for the years                    
ending June 30, 1994 through 1996 were immaterial and therefore                 
the Company did not feel it necessary to record any deferred                    
taxes as the result of the Tax Reform Act.  As of the date of                   
this filing, the Company does not feel that future years'                       
liquidity and operations will be adversely affected by the Tax                  
Reform Act of 1986 or the Revenue Reconciliation Act of 1993.  In               
addition, the Company does not feel that any accounting changes,                
as proposed by the Financial Accounting Standards Board, with                   
effective dates after the date of this report, will have a                      
material effect on future financial statements of the Company.                  

ITEM 8    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                           

Financial statements meeting the requirements of Regulation           
S-X are contained on pages 12 through 31 of the filing.                         

(a)  Selected quarterly financial data                                

Exempt from requirements per second major condition for     
smaller companies.                                                              

(b)  Information about oil and gas producing activities               

Registrant is not engaged in any oil and gas producing      
activities.                                                                     

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ITEM 9    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON                      
ACCOUNTING AND FINANCIAL DISCLOSURE                                             

Not applicable.  There has been no change in                
accountants for approximately twenty-one years and no                           
disagreements on accounting or financial disclosure.                            

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Board of Directors                                                              
Chase General Corporation                                                       
St. Joseph, Missouri                                                            

INDEPENDENT AUDITOR'S REPORT              

We have audited the accompanying consolidated balance sheets of                 
Chase General Corporation and Subsidiary as of June 30, 1996 and                
1995 and the related consolidated statements of operations,                     
stockholders' equity and cash flows for each of the years in the                
three-year period ended June 30, 1996.  These consolidated                      
financial statements are the responsibility of the Company's                    
management.  Our responsibility is to express an opinion on these               
financial statements based on our audits.                                       

We conducted our audits in accordance with generally accepted                   
auditing standards.  Those standards require that we plan and                   
perform the audit to obtain reasonable assurance about whether                  
the financial statements are free of material misstatement.  An                 
audit includes examining, on a test basis, evidence supporting                  
the amounts and disclosures in the financial statements.  An                    
audit also includes assessing the accounting principles used and                
significant estimates made by management, as well as evaluating                 
the overall financial statement presentation.  We believe that                  
our audits provide a reasonable basis for our opinion.                          

In our opinion, the consolidated financial statements referred to               
above present fairly, in all material respects, the financial                   
position of Chase General Corporation and Subsidiary as of June                 
30, 1996 and 1995, and the results of their operations and their                
cash flows for each of the years in the three-year period ended                 
June 30, 1996, in conformity with generally accepted accounting                 
principles.                                                                     

St. Joseph, Missouri                                                            

August 21, 1996                                                                 

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CHASE GENERAL CORPORATION AND SUBSIDIARY              
CONSOLIDATED BALANCE SHEETS               
JUNE 30, 1996 AND 1995              

ASSETS              

                                                                [Download Table]

                                        1996       1995
                                                       
CURRENT ASSETS                                         
  Cash and cash equivalents          $236,316  $300,570
  Trade receivables, less                              
    allowance for doubtful                             
    accounts of $12,757 in                             
    1996 and $12,216 in 1995           74,754    70,851

  Inventories:                                         
    Finished goods                     51,204    67,614
    Goods in process                    2,024     3,276
    Raw materials                      42,189    71,059
    Packaging materials               104,565    68,354
  Prepaid expense                      42,659    46,255

       Total current assets           553,711   627,979

PROPERTY AND EQUIPMENT                                 
  Land                                 35,000    35,000
  Buildings                            76,273    76,273
  Machinery and equipment             593,754   520,793
  Trucks and autos                     87,683    54,639
  Office equipment                     30,155    23,976
  Leasehold improvements              119,146   114,102
    Total, at cost                    942,011   824,783
  Less accumulated depreciation       679,768   654,853

       Total property and equipment   262,243   169,930

TOTAL ASSETS                         $815,954  $797,909

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                                       STATEMENT 1

LIABILITIES AND STOCKHOLDERS' EQUITY              

                                                                [Download Table]

                                                       1996       1995     
                                                                           
CURRENT LIABILITIES                                                        
  Accounts payable                                  $  46,943   $ 45,763   
  Series B notes payable,                                                  
    related parties current                                                
    maturities                                          3,483     104,174  
  Series B notes payable,                                                  
    unrelated parties current                                              
    maturities                                          6,193     183,628  
  Income tax payable                                    2,164      11,253  
  Accrued expense:                                                         
    Interest                                           16,214      17,718  
    Other                                              23,078      24,177  

       Total current liabilities                       98,075     386,713  

LONG-TERM LIABILITIES                                                      
  Series B notes payable,                                                  
    related parties less                                                   
    current maturities above                           87,969        -     
  Series B notes payable,                                                  
    unrelated parties less                                                 
    current maturities above                          155,011        -     

       Total long-term liabilities                    242,980        -     

       Total liabilities                              341,055     386,713  

STOCKHOLDERS' EQUITY                                                       
  Capital stock issued and outstanding:                                    
    Prior cumulative preferred stock,                                      
       $5 par value:                                                       
          Series A (liquidation preference                                 
          $1,125,000 and $1,095,000                                        
          respectively)                                500,000    500,000  
       Series B (liquidation                                               
          preference $ 1,080,000                                           
          and $1,050,000 respectively)                 500,000    500,000  

    Cumulative preferred stock,                                            
       $20 par value:                                                      
          Series A (liquidation                                            
          preference $2,736,418                                            
          and $2,677,885 respectively)               1,170,660    1,170,660
       Series B (liquidation                                               
          preference $445,948                                              
          and $436,409 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                              (5,991,097)  (6,054,800)

       Total stockholders' equity                      474,899      411,196

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY            $815,954     $797,909


These consolidated financial statements should be read              
only in connection with the accompanying summary of               
significant accounting policies and notes to consolidated               
financial statements.               

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                                       STATEMENT 2

CHASE GENERAL CORPORATION AND SUBSIDIARY              
CONSOLIDATED STATEMENTS OF OPERATIONS               
YEARS ENDED JUNE 30, 1996, 1995 AND 1994              

                                                                [Download Table]

                                           1996        1995      1994   
                                                                        
NET SALES                               $2,316,031 $2,235,656 $2,476,259

COST OF SALES                            1,771,381  1,715,729  1,970,652

 Gross profit                              544,650    519,927    505,607

OPERATING EXPENSES                                                      
 Selling expense                           295,561    277,540    309,537
 General and                                                            
    administrative expense                 156,875    155,567    151,220

    Total operating expenses               452,436    433,107    460,757

      Income from operations                92,214     86,820     44,850

OTHER INCOME (EXPENSE)                                                  
 Interest income                             6,362      7,011     4,712 
 Miscellaneous income                        1,643      1,407     2,570 
 Loss on disposal of equipment                (69)      (128)    (1,267)
 Interest expense                         (16,214)   (17,718)   (19,536)

    Total other income                                                  
      (expense)                            (8,278)    (9,428)   (13,521)

      Income before income taxes            83,936     77,392    31,329 

PROVISION FOR INCOME TAXES                  20,233     17,246     5,908 

NET INCOME                                $ 63,703   $ 60,146  $ 25,421 

(LOSS) PER SHARE                          $  (.07)   $  (.07)  $  (.11) 


These consolidated financial statements should be read                
only in connection with the accompanying summary of               
significant accounting policies and notes to consolidated               
financial statements.               

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                                                        [Enlarge/Download Table]

                                                                         STATEMENT 3                          

                         CHASE GENERAL CORPORATION AND SUBSIDIARY                                             
                      CONSOLIDATED STATEMENTS OF STOCKHOLDERS'EQUITY                                          
                        YEARS ENDED JUNE 30, 1996, 1995 AND 1994                                              

                     Prior Cumulative          Cumulative       Common        Paid-in     Accumulated         
                     Preferred Stock        Preferred Stock      Stock        Capital       Deficit     Total 
                   Series A   Series B    Series A      Series B                                              
                                                                                                              
BALANCE (DEFICIT),                                                                                            
JULY 1, 1993      $500,000     $500,000  $1,170,660   $190,780  $969,834     $3,134,722  $(6,140,367) $325,629

  Net income         -            -           -          -         -             -             25,421   25,421

BALANCE (DEFICIT),                                                                                            
JUNE 30, 1994      500,000      500,000   1,170,660    190,780   969,834      3,134,722   (6,114,946)  351,050

  Net income          -            -          -           -         -             -           60,146    60,146

BALANCE (DEFICIT),                                                                                            
JUNE 30, 1995      500,000      500,000   1,170,660    190,780  969,834       3,134,722  (6,054,800)   411,196

  Net income         -            -           -          -        -              -            63,703    63,703

BALANCE (DEFICIT),                                                                                            
JUNE 30, 1996     $500,000     $500,000  $1,170,660   $190,780 $969,834      $3,134,722  $(5,991,097) $474,899

These consolidated financial statements should be read only in
    connection with the accompanying summary of significant accounting
    policies and notes to consolidated financial statements.

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                                                                [Download Table]

                             CHASE GENERAL CORPORATION AND SUBSIDIARY        
                              CONSOLIDATED STATEMENTS OF CASH FLOWS          
                             YEARS ENDED JUNE 30, 1996, 1995 AND 1994        


                                           1996         1995        1994     
                                                                             
CASH FLOWS FROM OPERATING ACTIVITIES                                         

 Collections from customers             $2,305,712   $2,239,899   $2,468,802 
 Interest received                           6,362        7,011        4,712 
 Other income                                1,643        1,407        2,570 
 Income tax refunds                            -         33,435        9,714 
 Cost of sales, selling,                                                     
  general and administrative                                                 
  expenses paid                        (2,161,733)   (2,141,693)  (2,355,152)
 Interest paid                            (17,718)      (18,693)     (20,845)
 Income tax paid                          (29,322)       (4,473)     (30,666)

  Net cash provided by                                                       
   operating activities                    104,944      116,893       79,135 

CASH FLOWS FROM INVESTING ACTIVITIES                                         
 Purchase of U.S. Treasury                                                   
  obligation                              (99,308)     (100,827)     (99,193)
 Purchase of certificate of                                                  
  deposit                                (100,000)       -              -    
 Purchases of property and                                                   
  equipment                              (134,052)      (10,161)     (35,693)
 Proceeds on redemption of U.S.                                              
  Treasury obligation                       99,308      200,020      101,364 
 Proceeds on redemption of                                                   
  certificate of deposit                   100,000        -         -        

  Net cash provided by (used in)                                             
   investing activities                  (134,052)       89,032      (33,522)

CASH FLOWS FROM FINANCING ACTIVITIES                                         
 Principal payments on bank                                                  
  notes payable                              -              -        (36,000)
 Principal payments on notes                                                 
  payable, Series B                       (35,146)     (15,000)      (17,504)
 Proceeds from short-term                                                    
  note payable                                -            -          36,000 

  Net cash used in                                                           
   financing activities                   (35,146)     (15,000)      (17,504)

NET INCREASE (DECREASE) IN CASH                                              
 AND CASH EQUIVALENTS                     (64,254)      190,925       28,109 

CASH AND CASH EQUIVALENTS,                                                   
 BEGINNING OF YEAR                         300,570      109,645       81,536 

CASH AND CASH EQUIVALENTS,                                                   
 END OF YEAR                              $236,316     $300,570      $109,645

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                                                      STATEMENT 4            

                                                                [Download Table]

                                             1996       1995       1994   
                                                                          
RECONCILIATION OF NET INCOME TO NET                                       
 CASH PROVIDED BY OPERATING ACTIVITIES                                    

 Net income                                $63,703    $60,146     $25,421 

 Adjustments to reconcile net                                             
   income to net cash provided by                                         
   operating activities:                                                  
  Depreciation                              41,670     42,903     50,144  
  Loss on disposal of                                                     
   equipment                                    69        128      1,267  
  Provision for doubtful                                                  
   accounts                                  6,416     10,033      6,450  
  Changes in operating assets                                             
   and liabilities:                                                       
     (Increase) decrease in trade                                         
       accounts receivable                (10,319)      4,243     (7,457) 
     (Increase) decrease in                                               
       inventories                          10,321    (7,709)      4,745  
     (Increase) decrease in                                               
       prepaid expense                       3,596      3,937     (25,811)
     (Increase) decrease in                                               
       prepaid income taxes                    -       34,955     (15,044)
     Increase (decrease) in                                               
       accounts payable                      1,180   (41,904)     36,018  
     Increase (decrease) in                                               
       income tax payable                  (9,089)     11,253        -    
     Increase (decrease) in                                               
       accrued liabilities                 (2,603)    (1,092)      3,402  

NET CASH PROVIDED BY                                                      
 OPERATING ACTIVITIES                     $104,944   $116,893     $79,135 


These consolidated financial statements should be read                
only in connection with the accompanying summary of               
significant accounting policies and notes to consolidated               
financial statements.               

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CHASE GENERAL CORPORATION AND SUBSIDIARY              
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES              

Chase General Corporation was incorporated on November 6, 1944 in               
the State of Missouri for the purpose of manufacturing                          
confectionery products.  The Company's fiscal year ends June 30.                
Significant accounting policies followed by the Company are                     
presented below:                                                                

PRINCIPLES OF CONSOLIDATION                                                     

The consolidated financial statements include the accounts of the               
Company and its wholly-owned subsidiary, Dye Candy Company.  All                
intercompany transactions have been eliminated in consolidation.                

ACCOUNTING METHOD                                                               

The Company and its subsidiary use the accrual method of                        
accounting.  Under this method, revenue is recognized when earned               
and expense is recognized when the obligation is incurred.                      

SEGMENT REPORTING OF THE BUSINESS                                               

The subsidiary, Dye Candy Company, operates two divisions, Chase                
Candy Company and Poe Candy Company.  Operations in Chase Candy                 
Company involve production and sale of a candy bar marketed under               
the trade name "Cherry Mash".  Operations in Poe Candy Company                  
involve production and sale of coconut, peanut, chocolate, and                  
fudge confectioneries.  Division products are sold to the same                  
type of customers in the same geographical areas.  In addition,                 
both divisions share a common labor force and utilize the same                  
basic equipment and raw materials.  Therefore, due to the                       
similarities in the products manufactured, segment reporting for                
the two divisions has not been disclosed in these financial                     
statements.                                                                     

For the year ending June 30, 1996 and June 30, 1995, one customer               
accounted for 10.79% and 11.88% of the gross sales respectively.                
No single customer accounted for 10% or more of gross sales for                 
the year ending June 30, 1994.                                                  

INVENTORIES                                                                     

Inventories are carried at the "lower of cost or market value,"                 
cost being determined on the "first-in, first-out" basis of                     
accounting.                                                                     

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CHASE GENERAL CORPORATION AND SUBSIDIARY              
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES              

PROPERTY AND EQUIPMENT                                                          

Depreciation is computed by the straight-line method for                        
additions prior to 1981, and by the ACRS and MACRS methods for                  
assets acquired after 1980 for both financial reporting and                     
income tax purposes.  Any difference between the amount of                      
depreciation determined under the ACRS and MACRS systems and that               
determined in accordance with generally accepted accounting                     
principles is considered to be immaterial.                                      

The Company's property and equipment are being depreciated on                   
straight-line and accelerated methods over the following                        
estimated useful lives:                                                         

Buildings                     25 years                      
Machinery and equipment       3 - 10 years                  
Trucks and autos              3 - 5 years                   
Office equipment              5 - 10 years                  
Leasehold improvements        8 - 31.5 years                

For the years ending June 30, 1996, 1995 and 1994, the                          
depreciation expense was $41,670, $42,903 and $50,144,                          
respectively.                                                                   

CASH AND CASH EQUIVALENTS                                                       

The Company considers all liquid investments with a maturity of                 
three months or less when purchased to be cash equivalents.                     

USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS                              

The preparation of financial statements in conformity with                      
generally accepted accounting principles requires management to                 
make estimates and assumptions that affect the reported amounts                 
of assets and liabilities and disclosure of contingent assets and               
liabilities at the date of the financial statements and the                     
reported amounts of revenues and expenses during the reporting                  
period.  Actual results could differ from those estimates.                      

This information is an integral part of the accompanying              
consolidated financial statements.              

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        CHASE GENERAL CORPORATION AND SUBSIDIARY
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - NOTES PAYABLE, SERIES B                                                

On December 1, 1967, the Company issued Collateral Sinking Fund                 
6% Income Registered Notes in the amount of $680,000.  These                    
notes were issued to extend and consolidate notes and                           
certificates of indebtedness then held by F. S. Yantis & Co.,                   
Inc. (Yantis & Co.), aggregating approximately $569,000 together                
with unpaid accrued interest of $111,000.  Interest is payable                  
from "surplus net earnings" on the 20th day of December following               
the fiscal year end.                                                            

Pursuant to a supplemental indenture, dated April 1, 1968 and                   
executed in compliance with a request by Yantis & Co. in                        
furtherance of the winding-up of its affairs, the original notes                
aggregating $680,000 were reissued in two series designated as A                
and B, respectively.  The Series A notes aggregating $50,000 had                
priority and were retired during the year ended June 30, 1984.                  
The Series B notes totaling $630,000 are held by the former                     
shareholders of Yantis & Co.  During the years ended June 30,                   
1996 and 1995, $35,146 and $15,000 principal was paid on the                    
Series B notes, respectively.                                                   

As of June 30, 1996 and 1995, the outstanding Series B notes                    
total $252,656 and $287,802, respectively. Of these amounts                     
$91,452 and $104,174 are owed to officers and directors of the                  
Company.                                                                        

The Company has agreed to secure the payment of principal and                   
interest on the notes by the pledge of the capital stock of Dye                 
Candy Company under an indenture dated December 1, 1967, and                    
supplemental indenture dated June 30, 1970.                                     

The indenture provides for a sinking fund deposit to be made by                 
the Company each year of not less than one-fourth of the                        
Company's fiscal year "surplus net earnings," which exceeds the                 
amount of interest required to be paid on the outstanding notes.                
If at any time the sinking fund deposits aggregate $10,000 or                   
more, the same will be applied to prepayment of the notes                       
outstanding.  At June 30, 1996 and 1995, all sinking fund                       
deposits had been disbursed to the noteholders.  The "surplus net               
earnings" is the amount by which the consolidated net income,                   
after adding back the current year's interest on the outstanding                
notes, exceeds a $25,000 working capital reserve.                               

See Note 2 for computation of "surplus net earnings" and sinking                
fund requirements for years ended June 30, 1996, 1995 and 1994.                 

(Continued)               

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CHASE GENERAL CORPORATION AND SUBSIDIARY              
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS              

NOTE 1 - NOTES PAYABLE, SERIES B (CONTINUED)                                    

Principal payments are made by the trustee under terms of the                   
indenture and may be prepaid at the option of the Company.                      
During the year ended June 30, 1991, the notes were extended to                 
December 20, 1994.  Effective December 20, 1995, the notes were                 
extended to December 20, 2002 at the same 6% interest rate and                  
with the agreement that this will be the final note extension.                  
Due to the nature of sinking fund requirements, it is not                       
practicable to include a schedule of future principal payments.                 

Dividends, other than stock dividends, may not be paid on capital               
stock at any time interest on the notes is not current.                         

NOTE 2 - "SURPLUS NET EARNINGS" AND SINKING FUND REQUIREMENTS                   

The following is an analysis of the computation of the "surplus                 
net earnings" and sinking fund requirements for years ended June                
30:                                                                             

                                                                [Download Table]

                                        1996      1995      1994    
                                                                    
NET INCOME (LOSS)                                                   
 Chase General Corporation           $(18,655)  $(18,922)  $(23,890)
 Dye Candy Company                      82,358    79,068     49,311 

    Consolidated net income             63,703    60,146     25,421 

NON-ALLOWANCE EXPENSE DEDUCTION                                     
 Interest on indebtedness               16,214    17,718     18,693 

      Net income basis for                                          
         "surplus net earnings"         79,917    77,864     44,114 

DEDUCTIONS FROM INCOME BASIS                                        
 Set aside as reserve for                                           
    accumulation of working capital     25,000    25,000     25,000 

         "Surplus net earnings"         54,917    52,864     19,114 

INTEREST PAYMENT REQUIRED               16,214    17,718     18,693 

EXCESS "SURPLUS NET EARNINGS"                                       
 OVER INTEREST PAYMENT REQUIRED      $  38,703   $ 35,146   $    421

SINKING FUND REQUIREMENT             $   9,676   $  8,787   $    105


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CHASE GENERAL CORPORATION AND SUBSIDIARY              
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS              

NOTE 3 - COMMITMENTS                                                            

Dye Candy Company leases its manufacturing facilities located at                
3600 Leonard Road, St. Joseph, Missouri.  The original lease,                   
which commenced March 31, 1975, was for a twenty-year period and                
required a monthly rental fee of $2,263, payable on the first day               
of each calendar month.  This lease was renegotiated effective                  
April 1, 1995 for 10 years at $2,955 per month.  Rental expense                 
for the years ended June 30, 1996, 1995 and 1994 totaled $37,723,               
$29,232 and $27,156, respectively and is included in cost of                    
sales.                                                                          

Future minimum lease payments under this lease are as follows:                  

Year ending June 30, 1997                 $  35,460                             
Year ending June 30, 1998                    35,460                             
Year ending June 30, 1999                    35,460                             
Year ending June 30, 2000                    35,460                             
Year ending June 30, 2001                    35,460                             
Later years                                 132,975                             

Total                                $ 310,275                        

The manufacturing facilities referred to above were owned by Dye                
Candy Company prior to March 31, 1975.  When the building was                   
sold on March 31, 1975, the gain on the sale of the building was                
included in the income of Dye Candy Company in the year of sale.                
Financial Accounting Standards Board Statement 13, Accounting for               
leases, calls for the amortization of any profit or loss on a                   
sale-leaseback transaction to be amortized in proportion to the                 
amortization of the leased asset.  However, the effective date of               
FASB 13 was for transactions entered into after January 1, 1977.                

As of June 30, 1996, the Company had purchase commitments with                  
four vendors for approximately $269,000.                                        

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CHASE GENERAL CORPORATION AND SUBSIDIARY              
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS              

NOTE 4 - CAPITAL STOCK                                                          

Capital stock authorized, issued and outstanding as of June 30,                 
1996 and 1995 is as follows:                                                    

                                                                [Download Table]

                                                          SHARES         
                                                              ISSUED AND 
                                                  AUTHORIZED  OUTSTANDING
                                                                         
Prior Cumulative Preferred Stock,                                        
$5 par value:                                       240,000              
  6% Convertible                                                         
   Series A                                                      100,000 
   Series B                                                      100,000 

Cumulative Preferred Stock,                                              
$20 par value:                                      150,000              
  5% Convertible                                                         
     Series A                                                     58,533 
   Series B                                                        9,539 

Common Stock, $1 par value                        2,000,000      969,834 
  Reserved for conversion of                                             
   Preferred Stock - 1,030,166 shares                                    

Cumulative Preferred Stock dividends in arrears at June 30, 1996                
and 1995, totaled $5,387,366 and $5,259,294, respectively.  Total               
dividends in arrears, on a per share basis, consist of the                      
following at June 30:                                                           

                                  1996      1995
6% Convertible                                                                  
Series A                                     $11       $11            
Series B                                      11        11            

5% Convertible                                                                  
Series A                                      47        46            
Series B                                      47        46            

(Continued)               

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CHASE GENERAL CORPORATION AND SUBSIDIARY              
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS              

NOTE 4 - CAPITAL STOCK (CONTINUED)                                              

Six Percent 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 four 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.                                                    

NOTE 5 - PROVISION FOR INCOME TAXES                                             

The provision for income taxes consists of the following as of                  
June 30:                                                                        

                       1996      1995     1994

Federal income tax                    $15,420   $13,204   $4,357                
State income tax                        4,813     4,013    1,576                
Correction of prior year                                                        
provision                              -           29     (25)              

Total provision                     $20,233   $17,246   $5,908              

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CHASE GENERAL CORPORATION AND SUBSIDIARY              
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS              

NOTE 6 - (LOSS) PER SHARE                                                       

The (loss) per share was computed on the weighted average of                    
outstanding common shares during the years as follows:                          

               1996       1995      1994

Net income                         $63,703   $60,146   $25,421                  

Preferred dividend requirements:                                                
6% Prior Cumulative Preferred,                                              
$5 par value                      60,000   60,000     60,000                
5% Convertible Cumulative                                                   
Preferred, $20 par value       68,072   68,072     68,072             

Total dividend requirements   128,072  128,072    128,072             

Net (loss) - common                                                 
stockholders             $(64,369) $(67,926) $(102,651)         

Weighted average of                                                   
outstanding common shares   969,834   969,834    969,834            

(Loss) per share          $   (.07)  $  (.07)   $   (.11)           

No computation was made on common stock equivalents outstanding                 
at year-end because earnings per share would be anti-dilutive.                  

NOTE 7 - CONCENTRATIONS OF CREDIT RISK                                          

The Company's confectionery products are sold primarily in the                  
Midwest region of the United States to repackers, grocery                       
accounts, and national syndicate accounts.  The Company grants                  
credit terms to substantially all customers.                                    

The Company maintains all of its cash and temporary investments                 
in one commercial bank located in St. Joseph, Missouri.  Balances               
on deposits are insured by the Federal Deposit Insurance                        
Corporation (FDIC) up to specified limits.  Balances in excess of               
FDIC limits are uninsured.  Total cash and temporary investments                
held by the bank was $236,316 and $300,570 at June 30, 1996 and                 
1995, respectively.                                                             

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CHASE GENERAL CORPORATION AND SUBSIDIARY              
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS              

NOTE 8 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS                  

The Company's financial instruments consist principally of cash                 
and cash equivalents, trade receivables and payables, and notes                 
payable.  There are no significant differences between the                      
carrying value and fair value of any of these financial                         
instruments.                                                                    

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CHASE GENERAL CORPORATION AND SUBSIDIARY              
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS              

NOTE 9 - REGISTRANT ONLY FINANCIAL STATEMENTS                                   

CHASE GENERAL CORPORATION               
(REGISTRANT ONLY)               
CONDENSED BALANCE SHEETS              
JUNE 30, 1996 AND 1995              

ASSETS              

                          1996          1995

Income tax refund receivable             $  5,853     $  5,413                  
Investment in subsidiary - at equity      737,916      711,303                  

TOTAL ASSETS                             $743,769     $716,716                  

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)              

Series B notes payable and                                                      
accrued interest,                                                         
unrelated parties                     $171,549     $194,933               
Series B notes payable and                                                      
accrued interest,                                                         
related parties                         97,321      110,587               

Total liabilities                      268,870      305,520               

Capital stock                           3,331,274    3,331,274                  

Paid in capital in excess of par        3,134,722    3,134,722                  

Accumulated (deficit)                  (5,991,097)  (6,054,800)                 

Total stockholders' equity             474,899      411,196               

TOTAL LIABILITIES AND                                                           
STOCKHOLDERS' EQUITY                   $743,769     $716,716                

(1)  The restricted assets of Dye Candy Company are $815,954 and                
$797,909 as of June 30, 1996 and 1995, respectively.                            

(2)  No cash dividends have been paid by the registrants'                       
wholly-owned subsidiary, Dye Candy Company, during the past three               
fiscal years.                                                                   

(Continued)               

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CHASE GENERAL CORPORATION AND SUBSIDIARY              
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS              

NOTE 9 - REGISTRANT ONLY FINANCIAL STATEMENTS (CONTINUED)                       

CHASE                     GENERAL CORPORATION                                   
(REGISTRANT ONLY)               
CONDENSED STATEMENTS OF OPERATIONS              
YEARS ENDED JUNE 30, 1996, 1995 AND 1994              

                    1996      1995      1994
REVENUE                                                                         

Equity in net income of                                                     
subsidiary                     $ 82,358   $ 79,068  $ 49,311            

Total revenue                   82,358      79,068    49,311            

EXPENSE                                                                         

General and administrative         8,294       6,617    10,939              
Interest                          16,214      17,718    18,693              

Total expense                   24,508      24,335    29,632            

Income before income taxes    57,850      54,733    19,679          

PROVISION (CREDIT) FOR                                                          
INCOME TAXES                     (5,853)      (5,413)   (5,742)             

NET INCOME                       $ 63,703      $ 60,146  $ 25,421               

(Continued)               

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CHASE GENERAL CORPORATION AND SUBSIDIARY              
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS              

NOTE 9 - REGISTRANT ONLY FINANCIAL STATEMENTS (CONTINUED)                       

CHASE GENERAL CORPORATION               
(REGISTRANT ONLY)               
CONDENSED STATEMENTS OF CASH FLOWS              
YEARS ENDED JUNE 30, 1996, 1995 AND 1994              

                          1996       1995       1994
CASH FLOWS FROM OPERATING ACTIVITIES                                            

General and administrative                                                  
expenses paid                    $(8,294)   $(6,617)   $(10,939)      
Interest paid                       (17,718)   (18,693)    (20,002)         
Income tax refund received            5,413      5,742       7,519          

Net cash used in                                                      
operating activities           (20,599)   (19,568)    (23,422)    

CASH FLOWS FROM INVESTING ACTIVITIES                                            

Advances received from                                                      
wholly owned subsidiary           55,745     34,568      40,926       

CASH FLOWS FROM FINANCING ACTIVITIES                                            

Principal payments on                                                       
Series B notes payable           (35,146)   (15,000)    (17,504)      

NET DECREASE IN CASH AND                                                        
CASH EQUIVALENTS                       -          -            -            

CASH AND CASH EQUIVALENTS,                                                      
BEGINNING OF YEAR                      -          -             -           

CASH AND CASH EQUIVALENTS,                                                      
END OF YEAR                       $    -      $   -         $   -           

(Continued)               

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CHASE GENERAL CORPORATION AND SUBSIDIARY              
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS              

NOTE 9 - REGISTRANT ONLY FINANCIAL STATEMENTS (CONTINUED)                       

CHASE GENERAL CORPORATION               
(REGISTRANT ONLY)               
CONDENSED STATEMENTS OF CASH FLOWS              
YEARS ENDED JUNE 30, 1996, 1995 AND 1994              

                                        1996      1995      1994
RECONCILIATION OF NET INCOME TO NET                                             
CASH USED IN OPERATING ACTIVITIES                                           

Net income                                  $63,703    $60,146   $25,421      

Adjustments to reconcile net                                                  
income to net cash                                                        
used in operating                                                         
activities:                                                               
Net income from wholly                                                      
owned subsidiary                         (82,358)   (79,068)   (49,311)   

Changes in operating                                                        
assets and liabilities:                                               
Decrease in accrued interest            (1,504)      (975)    (1,309) 
(Increase) decrease in                                                
income tax refund                                                   
receivable                               (440)        329     1,777 

NET CASH USED IN                                                                
OPERATING ACTIVITIES                      $(20,599)  $(19,568)  $(23,422)     

This information is an integral part of the accompanying              
consolidated financial statements.              

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PART III              

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                    

(a)  Directors                                                        

Name          Age   Periods of Service   Terms            
as Director 

W.A. Yantis, III    53   1980 to present     One year                 
Barry M. Yantis     51   1980 to present     One year                 
Brian A. Yantis     48   07-16-86 to present One year                 

See Item 10(b) for offices held by Barry M. Yantis and Brian A.                 
Yantis.  W.A. Yantis, III has never held an office with the                     
Company.                                                                        

(b)  Executive Officers                                               
            Years of
          Service as
Name           Age    Position     an Officer           Term          

Barry M. Yantis     51   President and      16     Until successor elected      
Treasurer                 

Brian A. Yantis     48   Vice-President      5     Until successor elected      
and Secretary                 

(c)  Certain Significant Employees                                    

There are no significant employees other than above.                  

(d)  Family Relationships                                             

W. A. Yantis, III, Barry M. Yantis, and Brian A. Yantis are           
brothers.                                                                       

(e)  Business Experience                                              

(1)  Barry M. Yantis, president and treasurer has been an             
officer of the Company for sixteen years, eleven years as                       
vice-president and five years as president.  He has been on the                 
board of directors for sixteen years and has been associated with               
the candy business for twenty-one years.                                        

Brian A. Yantis, vice-president and secretary has been      
an officer of the Company for five years as vice-president and                  
since May 1992 as secretary.  He has been associated with the                   
insurance business for twenty-four years and has been a                         
Vice-President of Rollins, Burdick, and Hunter in Chicago,                      
Illinois during the past nine years.                                            

(Continued)               

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ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                    
(CONTINUED)                                                                     

(e)  Business Experience (Continued)                                  

W.A. Yantis III, has served as a board member of Chase      
General Corporation for sixteen years.  He has held the position                
of account manager for Prudential Insurance Company Asset                       
Management Group in Newark, New Jersey during the past year and                 
in Chicago, Illinois during the prior eight years.                              

(2)  The directors and executive officers listed above are also 
the directors and executive officers of Dye Candy Company.                      

(f)  Involvement in Certain Legal Proceedings                         

Not applicable                                              

(g)  Promoters and Control Persons                                    

Not applicable                                              

ITEM 11 - EXECUTIVE COMPENSATION                                                

(a)  General                                                          

Executive officers are compensated for their services       
as set forth in the Summary Compensation Table.  These salaries                 
are approved yearly by the Board of Directors.                                  

(b)                                                                   

                                                        [Enlarge/Download Table]
                             Summary Compensation Table                                                       

                                                                              Long Term Compensation          
                           Annual Compensation                                 Awards          Payouts        
                                                           Other       Restricted                             
      Name and           Fiscal                            Annual        Stock    Option/  LTIP      All other
Principal Position      Year End        Salary   Bonus  Compensation   Award(s)  SARs(#) Payouts  Compensation
                                                                                                              
  Barry M. Yantis     1) 06-30-96     $ 103,850     -        -             -                 -            -   

  Barry M. Yantis     1) 06-30-95     $ 102,840     -        -             -                 -            -   

  Barry M. Yantis     1) 06-30-94     $  90,839     -        -             -                 -            -   

  1)   CEO                                                                                                    

  2)   No other compensation other than that which is listed in compensation table.                           

  3)   No other officers are compensated for their services than those listed in this compensation table.     


           (Continued)

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ITEM 11 - EXECUTIVE COMPENSATION (CONTINUED)                                    

(c)  Option/SAR grants table                                          

Not applicable                                              

(d)  Aggregated option/SAR exercises and fiscal year-end              
option/SAR value table                                                          

Not applicable                                              

(e)  Long-term incentive awards table                                 

Not applicable                                              

(f)  Defined benefit or actuarial plan disclosure                     

Not applicable                                              

(g)  Compensation of Directors                                        

Directors are not compensated for services on the           
board.  The directors are reimbursed for travel expenses incurred               
in attending board meetings.  During the fiscal year 1996,                      
$1,048, $289 and $-0- of travel expenses were reimbursed to board               
members, W.A. Yantis III, Brian A. Yantis, and Barry M. Yantis,                 
respectively.                                                                   

(h)  Employment contracts and termination of employment and           
change in control arrangements                                                  

Not applicable                                              

(i)  Report on repricing of option/SARs                               

Not applicable                                              

(j)  Additional information with respect to compensation              
committee interlocks and insider participation in compensation                  
decisions                                                                       

The registrant has no formal compensation committee.        
The board of directors, W.A. Yantis III, Brian A. Yantis, and                   
Barry M. Yantis, who are brothers, annually approve the                         
compensation of Barry M. Yantis, CEO.                                           

(k)  Board compensation committee report on executive                 
compensation                                                                    

The board bases the annual salary of the CEO on the         
Company's prior year performance.  The criteria is based upon,                  
but is not limited to, market area expansion, gross profit                      
improvement, control of operating expenses, generation of                       
positive cash flow, and hours devoted to the business during the                
previous fiscal year.                                                           

(Continued)               

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ITEM 11 - EXECUTIVE COMPENSATION (CONTINUED)                                    

(l)  Performance graph                                                

Not applicable as there are no dividends available to       
distribute to common stockholders after preferred dividends are                 
met.  In addition, there is no market value price for the common                
stock (par value $1 per share) as there is no public trading                    
market for the Company's stock.                                                 

ITEM 12  -     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS                  
AND MANAGEMENT                                                                  

                                                                [Download Table]

                                                      Amounts                
                                                        and                  
                                                       Nature                
                                                         of                  
                                                      Beneficial             
       Title of Class         Name and Address        Ownership    % of Class

(a)  Security ownership of certain beneficial owners                         
                                                                             
Common; par value                                                            
$1 per share                  W.A. Yantis Trust /1/   291,577 /2/   25.3% /3/
                              c/o Barry Yantis                               
                              5605 Osage Drive                               
                              St. Joseph, Missouri                           
                              64503                                          

(b)  Security ownership of management                                        

Common; par value             All directors           110,856 /4/   11.4%    
$1 per share                  and officers                                   
                              as a group                                     

Prior Cumulative Preferred,   W.A. Yantis Trust /1/   21,533 /5/    21.5%    
$5 par value:  Series A,      c/o Barry Yantis                               
6% convertible                5605 Osage Drive                               
                              St. Joseph, Missouri                           
                              64503                                          

Prior Cumulative Preferred    W.A. Yantis Trust /1/   21,533 /5/    21.5%    
$5 par value:  Series B,      c/o Barry Yantis                               
6% convertible                5605 Osage Drive                               
                              St. Joseph, Missouri                           
                              64503                                          

Cumulative Preferred,         W.A. Yantis Trust /1/   3,017 /5/      5.2%    
$20 par value:  Series A,     c/o Barry Yantis                               
$5 convertible                5605 Osage Drive                               
                              St. Joseph, Missouri                           
                              64503                                          

(Continued)               

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ITEM 12 -  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND                  
MANAGEMENT (CONTINUED)                                                          

                                     Amounts
                                     and
                                    Nature
                                    of
                                      Beneficial
 Title of Class          Name and Address         Ownership    % ofClass

Cumulative Preferred,         W.A. Yantis Trust /1/      630 /5/     6.6%       
$20 par value:  Series B,     c/o Barry Yantis                                  
$5 convertible                5605 Osage Drive                                  
St. Joseph, Missouri
64503               

/1/  W. A. Yantis passed away September 25, 1986.  Brian Yantis,                
Barry Yantis, and W.A. Yantis, III are the beneficiaries of this                
trust and the stock held in this trust will be divided equally                  
among the beneficiaries.  As of June 30, 1996, the assets from                  
the W.A. Yantis trust have not yet been distributed.                            

/2/  Includes 180,721 shares which could be received within 30                  
days upon conversion of preferred stock.                                        

/3/  Reflects the percentage 291,577 shares would represent if                  
the 180,721 shares above were converted to common stock.                        

/4/  Represents 110,856 shares owned by W. A. Yantis Trust.                     

/5/  Held by W. A. Yantis Trust.                                                

(c)  No known change of control is anticipated except for the                   
change in control which will result when the stock from the W. A.               
Yantis Trust is distributed to the three beneficiaries.                         

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                        

(a)   Transactions with management and others                         

No reportable transactions with management and others,    
to which the registrant or its subsidiary was a party, have                     
occurred since the registrant's last fiscal year.  In addition,                 
there are no such currently proposed transactions.                              

(b)   Certain business relationships                                  

Not applicable                                            

(c)   Indebtedness of management                                      

Not applicable                                            

(Continued)               

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ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                        
(CONTINUED)                                                                     

(d)   Transactions with promoters                                     

Not applicable                                            

PART IV               

ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON               
FORM 8-K                                                                        

(a)  Documents filed as part of the Form 10-K                         

(1)  The following are included in Part II of this          
report:                                                                         

                                       Page Number

Independent Auditor's Report                         12     
Consolidated Balance Sheets -                               
June 30, 1996 and 1995                     13 - 14
Consolidated Statements of Operations                       
for the years ended June 30, 1996,                
1995, and 1994                                  15
Consolidated Statements of Stockholders'                    
Equity for the years ended June 30,               
1996, 1995, and 1994                            16
Consolidated Statements of Cash Flows                       
for the years ended June 30, 1996,                
1995, and 1994                             17 - 18
Summary of Significant Accounting Policies      19 - 20     
Notes to Consolidated Financial Statements      21 - 27     
Registrant Only Financial Statements                        
(Note 9)                                   28 - 31

(2)  The following are included in Part IV of this          
report:                                                                         

                                       Page Number

Independent Auditor's Report on                             
Supplemental Schedule                           39

Schedule  II:  Valuation and Qualifying                     
Accounts, June 30, 1996, 1995, and                
1994                                            40

Exhibit 3i:  Amendment to Articles of                       
Incorporation                              41 - 44

Exhibit 3ii:  Amendment to By-Laws                   45     

(b)  Reports on Form 8-K                                              

No reports on Form 8-K were filed during the fourth         
quarter of the year ended June 30, 1996.                                        

(Continued)               

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ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON               
FORM 8-K                                                                        

(c)  Exhibits required by Item 601 of Regulation S-K                  

The following have been previously filed and are            
incorporated by reference to prior years' Forms 10-K filed by the               
Registrant:                                                                     

(3) Articles of Incorporation and By-Laws                   
(21) Subsidiaries of registrant                             

The following explanations are included in "Notes to        
Financial Statements" in Part II of this report:                                

(4)  Rights of security holders including indentures -      
Refer to Notes 1 and 4.                                                         
(11) Computation of per share earnings - Refer to Note      
6.                                                                              
(21) Subsidiaries of registrant - Refer to "Summary of      
Significant Accounting Policies".                                               

(d)  Financial statement schedules required by Regulation             
S-X                                                                             

Note 9 included in "Notes to Financial Statements" on       
page 28 through 31 was excluded from the annual report to                       
shareholders.                                                                   

In addition the Schedule required by Regulation S-X         
contained on page 40 and the Amendments to the Articles of                      
Incorporation and By-Laws required by item 601 of regulation S-K                
contained on pages 41 through 45 have been excluded from the                    
annual report to the shareholders.                                              

SUPPLEMENTAL INFORMATION TO BE FURNISHED, FILED             
PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934,               
BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO                 
SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934.                              

(1)  With this filing, the Registrant is furnishing to      
the Commission four (4) copies of the Proxy Statement regarding                 
the January 19, 1996 annual meeting mailed to security holders                  
during the 1996 fiscal year.                                                    

(2)  During 1997 fiscal year, the Registrant will           
furnish a copy of the annual report and any Proxy information to                
the Commission at time the aforementioned are mailed to security                
holders.                                                                        

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INDEPENDENT AUDITOR'S REPORT ON SUPPLEMENTAL SCHEDULE               

In connection with the audit of the consolidated financial                      
statements of Chase General Corporation and Subsidiary, we have                 
also audited supplemental schedule II.  In our opinion, this                    
schedule presents fairly the financial position as set forth                    
therein, in conformity with generally accepted accounting                       
principles.                                                                     

St. Joseph, Missouri                                                            

August 21, 1996                                                                 

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                                       SCHEDULE II

                                                        [Enlarge/Download Table]

           CHASE GENERAL CORPORATION AND ITS SUBSIDIARY                                       
                VALUATION AND QUALIFYING ACCOUNTS                                             
                  JUNE 30, 1996, 1995, AND 1994                                               


     Column A                         Column B    Column C. Additions   Column D    Column E  
                                     Balance at       Charged to                     Balance  
                                     Beginning          Costs                        at end   
     Description                     of Period       and Expenses      Deductions*   of Period

                                                                                              
Valuation accounts deducted from                                                              
 assets to which they apply for                                                               
 doubtful accounts receivable:                                                                

June 30, 1996                        $12,216         $ 6,416            $ 5,875       $12,757 
June 30, 1995                         13,496          10,033             11,313        12,216 
June 30, 1994                         13,755           6,450              6,709        13,496 


* Represents accounts written off, net of (recoveries), for the                 
respective years.                                                               

This information should be read only in connection              
with the accompanying independent auditor's               
report on supplemental schedule.              

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SIGNATURES              

Pursuant to the requirements of Section 13 or 15(d) of the                      
Securities Exchange Act of 1934, the Registrant has duly caused                 
this report to be signed on its behalf by the undersigned,                      
thereunto duly authorized.                                                      

               CHASE GENERAL CORPORATION
  (REGISTRANT)

Date: 9/30/96                      By:  /s/  Barry M. Yantis                    
                Barry M. Yantis, President

Pursuant to the requirements of the Securities Exchange Act of                  
1934, this report has been signed below by the following persons                
on behalf of the Registrant and in the capacities and on the                    
dates indicated below.                                                          

 President, Treasurer (Principal Executive
  Officer and Chief Financial and Accounting
Officer) and Director                   

/s/ Barry M. Yantis                                        9-30-96              
Barry M. Yantis                                              Date               

Vice-President, Secretary and Director  

/s/ Brian A. Yantis                                        9-30-96              
Brian A. Yantis                                              Date               

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-K405’ Filing		Date		First		Last			Other Filings
		12/20/02		2		22
		6/30/97		23					10-K405,  NT 10-K
Filed on:		10/10/96
		8/21/96		12		39
For Period End:		6/30/96		1		40			NT 10-K
		5/23/96		8
		1/19/96		38
		12/20/95		2		22
		11/24/95		8
		6/30/95		3		40
		4/1/95		6		23
		3/31/95		6		9
		12/22/94		8
		12/20/94		2		22
		6/30/94		3		40
		7/1/93		16
									List all Filings

3 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 9/26/23  Chase General Corp.               10-K        6/30/23   59:5.1M                                   Toppan Merrill Bridge/FA
10/13/21  Chase General Corp.               10-K        6/30/21   57:3.9M                                   Toppan Merrill/FA
 9/24/20  Chase General Corp.               10-K        6/30/20   61:3.9M                                   Toppan Merrill/FA