UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549





Form 10-Q/A

(Amendment No. 1)





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



For the quarterly period ended September
30, 2018



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



For the transition period from          to



Commission File Number 2-5916



Chase General
Corporation












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



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



1307 South
59th, St. Joseph, Missouri 64507

(Address
of principal executive offices, Zip Code)



(816) 279-1625

(Issuer’s telephone number, including
area code)



Indicate by check mark if the
registrant is a well-known issuer, as defined in Rule 405 of the Securities Act. Yes  ̈
No x



Indicate by check mark if the registrant
is not required to file reports pursuant to Section 13 of Section 15(d) of the Act.
Yes  ̈   No x



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



Indicate by check mark whether the registrant
(1) has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required
to submit such files). Yes x    No  ̈



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



|Large accelerated filer  ̈ |  | Accelerated filer  ̈        
|------------------------- |  | ---------------------------
|Nonaccelerated
filer x    |  | Smaller reporting company x
|Emerging Growth Company  ̈ |  |                            



If an emerging growth company that prepares
its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act. Yes  ̈   No x



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



As of November 12, 2018, there were 969,834
shares of common stock, $1.00 par value, outstanding.




















Chase General
Corporation and Subsidiary

QUARTERLY
REPORT ON FORM 10-Q

TABLE OF
CONTENTS

FOR THE
THREE MONTHS ENDED SEPTEMBER 30, 2018







|Part 1  | Financial Information                                                                                                  |                                                                                          
|------- | ---------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------
|        |                                                                                                                        |                                                                                          
|        | Item 1.                                                                                                                | Condensed Consolidated Financial Statements                                              
|        |                                                                                                                        |                                                                                          
|        | Condensed consolidated Balance Sheet as of September 30, 2018 (Unaudited)
    and June 30, 2018                        | 1                                                                                        
|        |                                                                                                                        |                                                                                          
|        | Condensed consolidated statements of operations for the three months
    ended September 30, 2018 and 2017 (Unaudited) | 3                                                                                        
|        |                                                                                                                        |                                                                                          
|        | Condensed consolidated statements of cash flows for the three months
    ended September 30, 2018 and 2017 (Unaudited) | 4                                                                                        
|        |                                                                                                                        |                                                                                          
|        | Note
    to Condensed consolidated financial statements (Unaudited)                                                    | 5                                                                                        
|        |                                                                                                                        |                                                                                          
|        | Item 2.                                                                                                                | Management’s
    discussion and Analysis of Financial Condition and Results of Operations
|        |                                                                                                                        |                                                                                          
|        | Item 3.                                                                                                                | Quantitative
    and qualitative disclosures about market risk                           
|        |                                                                                                                        |                                                                                          
|        | Item 4.                                                                                                                | Controls
    and Procedures                                                              
|        |                                                                                                                        |                                                                                          
|Part II | Other
    Information                                                                                                  |                                                                                          
|        |                                                                                                                        |                                                                                          
|        | Item 1.                                                                                                                | Legal
    Procedures                                                                     
|        |                                                                                                                        |                                                                                          
|        | Item 1A.                                                                                                               | Risk Factors                                                                             
|        |                                                                                                                        |                                                                                          
|        | Item 2.                                                                                                                | Unregistered
    Sales of Equity Securities and Use of Proceeds                          
|        |                                                                                                                        |                                                                                          
|        | Item 3.                                                                                                                | Defaults
    upon senior securities                                                      
|        |                                                                                                                        |                                                                                          
|        | Item 4.                                                                                                                | Mine safety
    disclosures                                                              
|        |                                                                                                                        |                                                                                          
|        | Item 5.                                                                                                                | Other
    information                                                                    
|        |                                                                                                                        |                                                                                          
|        | Item 6.                                                                                                                | exhibits                                                                                 
|        |                                                                                                                        |                                                                                          
|        | Signatures                                                                                                             | 19                                                                                       













Chase General
Corporation and Subsidiary

PART I.
FINANCIAL INFORMATION

ITEM 1.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED
CONSOLIDATED BALANCE sheets







|                                                                                                   |  | September 30, |             |  | June 30, |  
|-------------------------------------------------------------------------------------------------- |  | ------------- | ----------- |  | -------- | -
|                                                                                                   |  | 2018          |             |  | 2018     |  
|                                                                                                   |  |               | (Unaudited) |  |          |  
|ASSETS                                                                                             |  |               |             |  |          |  
|                                                                                                   |  |               |             |  |          |  
|CURRENT ASSETS                                                                                     |  |               |             |  |          |  
|Cash and Cash Equivalents                                                                          |  | $             | 283         |  |          |  
|Trade Receivables, Net of Allowance for Doubtful Accounts
    of $13,689 and $13,389, Respectively |  |               | 553,964     |  |          |  
|Inventories:                                                                                       |  |               |             |  |          |  
|Finished Goods                                                                                     |  |               | 227,449     |  |          |  
|Goods in Process                                                                                   |  |               | 17,936      |  |          |  
|Raw Materials                                                                                      |  |               | 97,322      |  |          |  
|Packaging Materials                                                                                |  |               | 160,875     |  |          |  
|Prepaid Expenses                                                                                   |  |               | 36,013      |  |          |  
|Total Current Assets                                                                               |  |               | 1,093,842   |  |          |  
|                                                                                                   |  |               |             |  |          |  
|LONG-TERM ASSETS                                                                                   |  |               |             |  |          |  
|Property and Equipment:                                                                            |  |               |             |  |          |  
|Land                                                                                               |  |               | 35,000      |  |          |  
|Buildings                                                                                          |  |               | 77,348      |  |          |  
|Machinery and Equipment                                                                            |  |               | 851,791     |  |          |  
|Trucks and Autos                                                                                   |  |               | 163,039     |  |          |  
|Office Equipment                                                                                   |  |               | 33,025      |  |          |  
|Leasehold Improvements                                                                             |  |               | 72,068      |  |          |  
|Total                                                                                              |  |               | 1,232,271   |  |          |  
|Less Accumulated Depreciation                                                                      |  |               | 1,011,336   |  |          |  
|Total Property and Equipment, Net                                                                  |  |               | 220,935     |  |          |  
|                                                                                                   |  |               |             |  |          |  
|Total Assets                                                                                       |  | $             | 1,314,777   |  |          | $







The accompanying notes are an integral part
of the unaudited

condensed consolidated financial statements.



1









Chase General
Corporation and Subsidiary

PART I.
FINANCIAL INFORMATION

ITEM 1.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED
CONSOLIDATED BALANCE sheets (CONTINUED)





|                                                                              |  | September 30, |             |   | June 30, |  
|----------------------------------------------------------------------------- |  | ------------- | ----------- | - | -------- | -
|                                                                              |  | 2018          |             |   | 2018     |  
|                                                                              |  |               | (Unaudited) |   |          |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                          |  |               |             |   |          |  
|                                                                              |  |               |             |   |          |  
|CURRENT LIABILITIES                                                           |  |               |             |   |          |  
|Bank Overdraft                                                                |  | $             | 12,846      |   |          | $
|Accounts Payable                                                              |  |               | 294,706     |   |          |  
|Current Maturities of Notes Payable and Line of Credit                        |  |               | 321,365     |   |          |  
|Accrued Expenses                                                              |  |               | 57,953      |   |          |  
|Refund Liability Owed to Customers                                            |  |               | 18,274      |   |          |  
|Deferred Income                                                               |  |               | 1,299       |   |          |  
|Total Current Liabilities                                                     |  |               | 706,443     |   |          |  
|                                                                              |  |               |             |   |          |  
|LONG-TERM LIABILITIES                                                         |  |               |             |   |          |  
|                                                                              |  |               |             |   |          |  
|Notes Payable, Less Current Maturities                                        |  |               | 21,892      |   |          |  
|Deferred Income                                                               |  |               | 7,142       |   |          |  
|Total Long-Term Liabilities                                                   |  |               | 29,034      |   |          |  
|                                                                              |  |               |             |   |          |  
|Total Liabilities                                                             |  |               | 735,477     |   |          |  
|                                                                              |  |               |             |   |          |  
|COMMITMENTS AND CONTINGENCIES                                                 |  |               |             |   |          |  
|                                                                              |  |               |             |   |          |  
|STOCKHOLDERS' EQUITY                                                          |  |               |             |   |          |  
|Capital Stock Issued and Outstanding:                                         |  |               |             |   |          |  
|Prior Cumulative Preferred Stock, $5 Par Value:                               |  |               |             |   |          |  
|Series A (Liquidation Preference $2,317,500 and $2,310,000,
    Respectively) |  |               | 500,000     |   |          |  
|Series B (Liquidation Preference $2,272,500 and $2,265,000,
    Respectively) |  |               | 500,000     |   |          |  
|Cumulative Preferred Stock, $20 Par Value:                                    |  |               |             |   |          |  
|Series A (Liquidation Preference $5,209,430 and $5,194,796,
    Respectively) |  |               | 1,170,660   |   |          |  
|Series B (Liquidation Preference $848,979 and $846,594,
    Respectively)     |  |               | 190,780     |   |          |  
|Common Stock, $1 Par Value                                                    |  |               | 969,834     |   |          |  
|Paid-In Capital in Excess of Par                                              |  |               | 3,134,722   |   |          |  
|Accumulated Deficit                                                           |  |               | (5,886,696  | ) |          |  
|Total Stockholders' Equity                                                    |  |               | 579,300     |   |          |  
|                                                                              |  |               |             |   |          |  
|Total Liabilities and Stockholders' Equity                                    |  | $             | 1,314,777   |   |          | $







The accompanying notes are an integral part
of the unaudited

condensed consolidated financial statements.



2









Chase General
Corporation and Subsidiary

PART I.
FINANCIAL INFORMATION

ITEM 1.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)







|                                   |  | Three Months Ended |        
|---------------------------------- |  | ------------------ | -------
|                                   |  | September 30       |        
|                                   |  | 2018               |        
|SALES                              |  | $                  | 741,520
|                                   |  |                    |        
|COST OF SALES                      |  |                    | 526,321
|Gross Profit on Sales              |  |                    | 215,199
|                                   |  |                    |        
|OPERATING EXPENSES                 |  |                    |        
|Selling                            |  |                    | 72,903 
|General and Administrative         |  |                    | 138,484
|Total Operating Expenses           |  |                    | 211,387
|                                   |  |                    |        
|Income (Loss) from Operations      |  |                    | 3,812  
|                                   |  |                    |        
|OTHER EXPENSE                      |  |                    |        
|Miscellaneous Income               |  |                    | 363    
|Interest Expense                   |  |                    | (2,883 
|Total Other Income (Expense)       |  |                    | (2,520 
|                                   |  |                    |        
|Income (Loss) before Income Taxes  |  |                    | 1,292  
|                                   |  |                    |        
|INCOME TAX EXPENSE (BENEFIT)       |  |                    | -      
|                                   |  |                    |        
|NET INCOME (LOSS)                  |  | $                  | 1,292  
|NET LOSS PER SHARE OF COMMON STOCK |  |                    |        
|Basic                              |  | $                  | (0.03  
|                                   |  |                    |        
|Diluted                            |  | $                  | (0.03  







The accompanying notes are an integral part
of the unaudited

condensed consolidated financial statements.





3









Chase General
Corporation and Subsidiary

PART I.
FINANCIAL INFORMATION

ITEM 1.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED
CONSOLIDATED STATEMENTS OF cash flows

(UNAUDITED)





|                                                        |  | Three Months Ended |         
|------------------------------------------------------- |  | ------------------ | --------
|                                                        |  | September 30       |         
|                                                        |  | 2018               |         
|CASH FLOWS FROM OPERATING ACTIVITIES                    |  |                    |         
|Net Income (Loss)                                       |  | $                  | 1,292   
|Adjustments to Reconcile Net Income (Loss) to Net Cash  |  |                    |         
|Used by Operating Activities:                           |  |                    |         
|Depreciation and Amortization                           |  |                    | 14,245  
|Allowance for Bad Debts                                 |  |                    | 300     
|Deferred Income Amortization                            |  |                    | (324    
|Deferred Income Taxes                                   |  |                    | -       
|Effects of Changes in Operating Assets and Liabilities: |  |                    |         
|Trade Receivables                                       |  |                    | (418,933
|Inventories                                             |  |                    | (57,940 
|Prepaid Expenses                                        |  |                    | (23,788 
|Income Taxes Receivable                                 |  |                    | -       
|Accounts Payable                                        |  |                    | 117,835 
|Accrued Expenses                                        |  |                    | 27,101  
|Refund Liability Owed to Customers                      |  |                    | 18,274  
|Net Cash Used by Operating Activities                   |  |                    | (321,938
|                                                        |  |                    |         
|CASH FLOWS FROM FINANCING ACTIVITIES                    |  |                    |         
|Proceeds from Line-of-Credit                            |  |                    | 310,000 
|Principal Payments on Notes Payable                     |  |                    | (2,754  
|Bank Overdraft                                          |  |                    | 12,846  
|Net Cash Provided by Financing Activities               |  |                    | 320,092 
|                                                        |  |                    |         
|NET DECREASE IN CASH AND CASH EQUIVALENTS               |  |                    | (1,846  
|                                                        |  |                    |         
|Cash and Cash Equivalents - Beginning of Period         |  |                    | 2,129   
|                                                        |  |                    |         
|CASH AND CASH EQUIVALENTS - END OF PERIOD               |  | $                  | 283     







The accompanying notes are an integral part
of the unaudited

condensed consolidated financial statements.



4


Chase General Corporation and SubsidiaryPART I. FINANCIAL INFORMATIONITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTSnotes to CONDENSED CONSOLIDATED financial STATEMENTS(UNAUDITED)




| | NOTE 1 | SIGNIFICANT ACCOUNTING POLICIES
| | ------ | -------------------------------



General

The condensed consolidated balance
sheet of Chase General Corporation (hereinafter referred to as Chase, we, our, and us) at June 30, 2018 has been condensed from
audited consolidated financial statements at that date. The condensed consolidated financial statements as of and for the three
months ended September 30, 2018 and for the three months ended September 30, 2017 are unaudited and reflect all normal and recurring
accruals and adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position,
operating results and cash flows for the interim periods presented in this quarterly report. The condensed consolidated financial
statements should be read in conjunction with the consolidated financial statements and notes thereto, together with management’s
discussion and analysis of financial condition and results of operations, contained in our Annual Report on Form 10-K for the year
ended June 30, 2018. The results of operations for the three months ended September 30, 2018 and cash flows for the three
months ended September 30, 2018 are not necessarily indicative of the results for the entire fiscal year ending June 30, 2019.
In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to fairly present
financial position, results of operations and cash flows for the periods have been included.



No events have occurred subsequent
to September 30, 2018, through the date of filing this form, that would require disclosure in this Form 10-Q or would be required
to be recognized in the condensed consolidated financial statements as of or for the three month period ended September 30, 2018.



Revenue
Recognition

The majority of our revenue
is derived by fulfilling customer orders for the purchase of our products, including 1) a candy bar marketed under the trade name
 “Cherry Mash” and 2) coconut, peanut, chocolate, and fudge confectioneries. The Company recognizes revenue at
the point in time that control of the ordered product(s) is transferred to the customer, which is typically upon shipment to the
customer. Shipping and handling costs incurred to ship product to the customer are recorded within cost of sales. Amounts billed
and due from our customers are classified as accounts receivables on the balance sheet and require payment on a short-term basis.
Generally, individual orders from customers are accounted for as a single performance obligation.



5


Chase General Corporation and SubsidiaryPART I. FINANCIAL INFORMATIONITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTSnotes to CONDENSED CONSOLIDATED financial STATEMENTS(UNAUDITED)




| | NOTE 1 | SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
| | ------ | -------------------------------------------



Revenue
Recognition (Continued)

Revenue is measured as the amount
of consideration we expect to receive in exchange for fulfilling product orders. Sales, value add, and other taxes we collect concurrent
with revenue-producing activities are excluded from revenue. The amount of consideration the Company expects to receive and revenue
the Company recognizes includes estimates of variable consideration, including costs for trade promotional programs, customer incentives,
and allowances and discounts associated with aged or potentially unsaleable products. These estimates are based upon our analysis
of the programs offered, historical trends, and expectations regarding customer and consumer participation, sales and payment trends
and our experience with payment patterns associated with similar programs offered in the past. The Company reviews and updates
these estimates regularly and the impact of any adjustments are recognized in the period the adjustments are identified. The adjustments
recognized in first quarter of the year ending June 30, 2019 resulting from updated estimates of revenue for prior year product
sales were not significant.



The majority of the Company’s
products are confectionery and confectionery-based and, therefore, exhibit similar economic characteristics, such that they are
based on similar ingredients and are marketed and sold through the same channels to the same customers. The Company operates two
divisions, Chase Candy Products and Seasonal Candy Products. Chase Candy Products involve production and sale of a candy bar marketed
under the trade name “Cherry Mash”. The Seasonal Candy Products involve production and sale of coconut, peanut, chocolate,
and fudge confectioneries. Both divisions share a common labor force and utilize the same basic equipment and raw materials. Management
considers these two divisions as one reportable segment. The various divisions of revenue are as follows for the three months
ended September 30:





|                       |  | 2018 |         |  | 2017 |  
|---------------------- |  | ---- | ------- |  | ---- | -
|Sales - Chase Candy    |  | $    | 294,447 |  |      | $
|Sales - Seasonal Candy |  |      | 447,073 |  |      |  
|Sales                  |  | $    | 741,520 |  |      | $



6


Chase General Corporation and SubsidiaryPART I. FINANCIAL INFORMATIONITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTSnotes to CONDENSED CONSOLIDATED financial STATEMENTS(UNAUDITED)




| | NOTE 1 | SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
| | ------ | -------------------------------------------



Recently
Adopted Pronouncements



In May 2014, the Financial Accounting
Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (ASC 606), which
replaces numerous requirements in U.S. GAAP, including industry-specific requirements, and provides companies with a single revenue
recognition model for recognizing revenue from contracts with customers. On July 1, 2018, we adopted the requirements of ASC 606
and all the related amendments to contracts that have not been completed as of the initial adoption date using the modified retrospective
method. Upon completing our implementation assessment of ASC 606, we concluded that no adjustment was required to the opening balance
of retained earnings at the date of initial application. The comparative information has not been restated and continues to be
reported under the accounting standards in effect for those periods.



The Company identified certain
amounts included in accounts payable that will be separately recorded as a current liability upon adoption of ASC 606. There will
be no impact to working capital as a result of these reclassifications. The cumulative effects of the changes made to our consolidated
July 1, 2018 balance sheet for the adoption of the new revenue standard were as follows:





|                                   |  | Balance at    |         |  | Adjustment    |   |         | Balance at   | 
|---------------------------------- |  | ------------- | ------- |  | ------------- | - | ------- | ------------ | 
|                                   |  | June 30, 2018 |         |  | Upon Adoption |   |         | July 1, 2018 | 
|Balance Sheet                      |  |               |         |  |               |   |         |              | 
|Accounts Payable                   |  | $             | 135,311 |  |               | $ | (12,900 | )            | 
|Refund Liability Owed to Customers |  |               | -       |  |               |   | 12,900  |              | 





There is no change in the timing
of revenue recognition upon adoption of ASC 606. The Company has identified certain amounts paid to customers which are currently
recorded as selling expense. Under ASC 606, these amounts will be recorded as a reduction to revenue as the Company does not receive
a distinct good or service in exchange for the payment. The total impact of adoption on our consolidated statement of operation
and balance sheet was as follows:





|                                   |  | As of and for the period ended September 30, 2018 |        
|---------------------------------- |  | ------------------------------------------------- | -------
|                                   |  | Current                                           |        
|                                   |  | Standard                                          |        
|Balance Sheet                      |  |                                                   |        
|Accounts Payable                   |  | $                                                 | 294,706
|Refund Liability Owed to Customers |  |                                                   | 18,274 
|                                   |  |                                                   |        
|Statement of Operations            |  |                                                   |        
|Sales                              |  | $                                                 | 741,520
|Selling Expenses                   |  |                                                   | 72,903 





7


Chase General Corporation and SubsidiaryPART I. FINANCIAL INFORMATIONITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTSnotes to CONDENSED CONSOLIDATED financial STATEMENTS(UNAUDITED)




| | NOTE 1 | SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
| | ------ | -------------------------------------------



Recently
Issued Pronouncements



In February 2016, the FASB issued
ASU No. 2016-02, Leases (Topic 842). This ASU will require lessees to recognize most leases on their balance sheet as lease liabilities
with corresponding right-of-use (ROU) assets. Recognition, measurement, and presentation of expenses will depend on classification
as a finance or operating lease. We are currently in the process of evaluating our existing lease portfolio, including accumulating
all of the necessary information required to properly account for the leases under the new standard. ASU 2016-02 is effective for
us beginning July 1, 2019. The guidance originally required entities to apply ASU 2016-02 on a modified retrospective basis; however,
the FASB has recently proposed guidance that would allow adoption of this standard as of the effective date without restating prior
periods. We expect adoption to result in a material increase in lease-related assets and liabilities on our consolidated balance
sheets; however, we do not expect it to have a significant impact on our consolidated statements of operations or cash flows.



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



| | NOTE 2 | EARNINGS (LOSS) PER SHARE
| | ------ | -------------------------



The loss per share were computed
on the weighted average of outstanding common shares during the period.





|                                                   |  | Three Months Ended |        
|-------------------------------------------------- |  | ------------------ | -------
|                                                   |  | September 30       |        
|                                                   |  | 2018               |        
|Net Income (Loss)                                  |  | $                  | 1,292  
|                                                   |  |                    |        
|Preferred Dividend Requirements:                   |  |                    |        
|6% Prior Cumulative Preferred, $5 Par Value        |  |                    | 15,000 
|5% Convertible Cumulative Preferred, $20 Par Value |  |                    | 17,018 
|Total Dividend Requirements                        |  |                    | 32,018 
|                                                   |  |                    |        
|Net Loss - Common Stockholders                     |  | $                  | (30,726





Diluted earnings per share are
calculated by including contingently issuable shares with the weighted average shares outstanding.



8


Chase General Corporation and SubsidiaryPART I. FINANCIAL INFORMATIONITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTSnotes to CONDENSED CONSOLIDATED financial STATEMENTS(UNAUDITED)




| | NOTE 2 | EARNINGS
(LOSS) PER SHARE (CONTINUED)
| | ------ | -------------------------------------





|                                                |  | Three Months Ended |          
|----------------------------------------------- |  | ------------------ | ---------
|                                                |  | September 30       |          
|                                                |  | 2018               |          
|Weighted Average Shares - Basic                 |  |                    | 969,834  
|Dilutive Effect of Contingently Issuable Shares |  |                    | 1,033,334
|Weighted Average Shares – Diluted               |  |                    | 2,003,168
|                                                |  |                    |          
|Basic Loss per Share                            |  | $                  | (0.03    
|                                                |  |                    |          
|Diluted Loss per Share                          |  | $                  | (0.03    





The contingently issuable shares
were not included in diluted earnings per common share as they would have an antidilutive effect upon earnings per share.



Cumulative Preferred Stock dividends
in arrears at September 30, 2018 and 2017 totaled $8,236,968 and $8,108,896, respectively. Total dividends in arrears, on a per
share basis, consist of the following:





|               |  | Three Months Ended |   
|-------------- |  | ------------------ | --
|               |  | September 30       |   
|               |  | 2018               |   
|6% Convertible |  |                    |   
|Series A       |  | $                  | 18
|Series B       |  | $                  | 17
|5% Convertible |  |                    |   
|Series A       |  | $                  | 69
|Series B       |  | $                  | 69





The 6% convertible prior cumulative
preferred stock may, upon 30 days prior notice, be redeemed by the Corporation at $5.25 a share plus unpaid accrued dividends to
date of redemption. In the event of voluntary liquidation, holders of this stock are entitled to receive $5.25 per share plus accrued
dividends. 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.



9


Chase General Corporation and SubsidiaryPART I. FINANCIAL INFORMATIONITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTSnotes to CONDENSED CONSOLIDATED financial STATEMENTS(UNAUDITED)




| | NOTE 3 | NOTES
                                         PAYABLE and line of credit
| | ------ | -------------------------------------------------------------------------



The Company’s long-term
debt consists of:





|                      |  |                                           |         | September 30, |         |   | June 30, |  
|--------------------- |  | ----------------------------------------- | ------- | ------------- | ------- | - | -------- | -
|Payee                 |  | Terms                                     |         | 2018          |         |   | 2018     |  
|Nodaway               |  | $350,000 line-of-credit agreement         |         |               |         |   |          |  
|Valley Bank           |  | expiring on January 4, 2019, with a       |         |               |         |   |          |  
|                      |  | variable interest rate at prime but not   |         |               |         |   |          |  
|                      |  | less than 5%.  The line-of-credit is      |         |               |         |   |          |  
|                      |  | collateralized by substantially all       |         |               |         |   |          |  
|                      |  | assets of the Company. Management         |         |               |         |   |          |  
|                      |  | anticipates renewal of the line-of-credit |         |               |         |   |          |  
|                      |  | agreement at similar terms upon           |         |               |         |   |          |  
|                      |  | expiration.                               |         | $             | 310,000 |   |          | $
|                      |  |                                           |         |               |         |   |          |  
|Ford Credit           |  | $705 monthly payments, interest of        |         |               |         |   |          |  
|                      |  | 5.8%; final payment due October 2021,     |         |               |         |   |          |  
|                      |  | secured by a vehicle.                     |         |               | 23,810  |   |          |  
|                      |  |                                           |         |               |         |   |          |  
|Toyota Credit         |  | $364 monthly payments, interest of        |         |               |         |   |          |  
|                      |  | 3.5%; final payment due December          |         |               |         |   |          |  
|                      |  | 2020, secured by a vehicle.               |         |               | 9,447   |   |          |  
|                      |  |                                           |         |               |         |   |          |  
|Total                 |  |                                           |         |               | 343,257 |   |          |  
|Less: Current Portion |  |                                           | 321,365 |               |         |   | 11,224   |  
|Long-Term Portion     |  | $                                         | 21,892  |               |         | $ | 24,787   |  





Future minimum payments for
the twelve months ending September 30 are:





|Twelve Months Ending September 30, |  | Amount |        
|---------------------------------- |  | ------ | -------
|2019                               |  | $      | 321,365
|2020                               |  |        | 11,946 
|2021                               |  |        | 9,245  
|2022                               |  |        | 701    
|2023                               |  |        | -      
|Total                              |  | $      | 343,257





10


Chase General Corporation and SubsidiaryPART I. FINANCIAL INFORMATIONITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTSnotes to CONDENSED CONSOLIDATED financial STATEMENTS(UNAUDITED)




| | NOTE 4 | INCOME TAXES
| | ------ | ------------



The Company follows the provisions
for uncertain tax positions as addressed in Financial Accounting Standards Board Accounting Standards Codification 740-10. The
Company recognized no liability for unrecognized tax benefits at September 30, 2018. The Company has no material tax positions
at September 30, 2018 for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing
of such deductibility. The Company’s federal income tax returns for the fiscal years ended 2016, 2017, and 2018 are subject
to examination by the Internal Revenue Service (IRS) taxing authority.





| | NOTE 5 | SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
| | ------ | -------------------------------------------------





|               |  | Three Months Ended |      
|-------------- |  | ------------------ | -----
|               |  | September 30       |      
|               |  | 2018               |      
|Cash Paid for: |  |                    |      
|Interest       |  | $                  | 2,883





| | NOTE 6 | DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
| | ------ | -----------------------------------------------------



The Company’s financial
instruments consist principally of cash and cash equivalents, trade receivables and payables, and notes payable. There are no significant
differences between the carrying value and fair value of any of these consolidated financial instruments. As of September 30, 2018,
the amount of the Company’s long-term debt approximates fair value based on the present value of estimated future cash flows
using a discount rate commensurate with a borrowing rate available to the Company.



11


Chase General Corporation and SubsidiaryPART I. FINANCIAL INFORMATIONITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS




OVERVIEW



Chase General Corporation (Chase) is a
holding company for its wholly owned subsidiary, Dye Candy Company. This subsidiary is the main operating company that is engaged
in the manufacture of confectionery products which are sold primarily to wholesale houses, grocery accounts, vendors, and repackers.
The subsidiary (Company) operates two divisions, Chase Candy division and Seasonal Candy division, which share a common labor force
and utilize the same basic equipment and raw materials. Therefore, segment reporting for the two divisions is not maintained by
management.



The Company’s business, like that
of many other confectionary product manufacturers, is seasonal. Historically, the Company has realized more of its revenue and
earnings in the fiscal second quarter, which includes the majority of the holiday shopping season, than in any other fiscal quarter.



RESULTS OF OPERATIONS - Three Months
Ended September 30, 2018 Compared with Three Months Ended September 30, 2017



The following management comments regarding
Chase’s results of operations and outlook should be read in conjunction with the condensed consolidated financial statements
included pursuant to Item 1 of the quarterly report.



The following table sets forth certain
items as a percentage of sales and revenues for the periods presented:





|                                  |  | Three Months Ended |    
|--------------------------------- |  | ------------------ | ---
|                                  |  | September 30       |    
|                                  |  | 2018               |    
|Sales                             |  |                    | 100
|Cost of Sales                     |  |                    | 71 
|Gross Profit on Sales             |  |                    | 29 
|Operating Expenses                |  |                    | 29 
|Income (Loss) from Operations     |  |                    | -  
|Other Income (Expense), Net       |  |                    | -  
|Income (Loss) before Income Taxes |  |                    | -  
|Provision for Income Taxes        |  |                    | -  
|Net Income (Loss)                 |  |                    | -  





12


Chase General Corporation and SubsidiaryPART I. FINANCIAL INFORMATIONITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS




SALES



Sales decreased $128,910 or 15% for the
three months ended September 30, 2018 to $741,520 compared to $870,430 for the three months ended September 30, 2017. Sales for
Seasonal Candy decreased $77,854 to $460,284 for the three months ended September 30, 2018, compared to $538,138 for 2017. Sales
for Chase Candy decreased $46,839 to $302,182 for the three months ended September 30, 2018, compared to $349,021 for 2017. Sales
allowances and discounts for the Company decreased $15,179 to $2,083 for the three months ended September 30, 2018, compared to
$17,262 for 2017. The Company’s other sales increased $406 to $939 for the three months ended September 30, 2018, compared
to $533 for 2017. Due to the adoption of ASC 606, adjustments disclosed in Note 1 totaling $19,802 for the three months ended September
30, 2018 were recorded as a reduction to revenue.



The 14% decrease in sales of Seasonal Candy
of $77,854 for the three months ended September 30, 2018 over the same period ended September 30, 2017, is primarily due to
the net effect of the following: 1) decreased orders in the bulk seasonal division netting approximately $78,000 due to decreased
sales to existing customers; 2) decreased orders from various customers in the clamshell seasonal division netting approximately
$70,000 versus the same period a year ago primarily due to existing customers decreasing orders; offset by 3) increased orders
from customers in the generic seasonal division netting approximately $70,000 versus the same period a year ago primarily due to
existing customer increasing orders; and 4) an approximate 5% average increase to the price of Seasonal Candy products.



The 13% decrease in sales of Chase Candy
of $46,839 for the three months ended September 30, 2018 over the same period ended September 30, 2017, is primarily due to
the net effect of the following: 1) decreased sales of the L276 Cherry Mash Distributor Pack division by approximately $34,000
versus the same period a year ago primarily due to decreased orders from existing customers; 2) decreased sales of L278/L212 Mini
Mash division by approximately $14,000 versus the same period a year ago primarily due to decreased orders from existing customers;
and 3) decreased sales of L279 and L299 Bulk Mini Mash division by approximately $13,000 versus the same period a year ago due
to decreased orders from existing customers; offset by 4) increased sales of L100, L200, SK436, and SK2100 Cherry Mash Merchandisers
division by approximately $14,000 versus the same period a year ago due to increased orders from existing customers.



COST OF SALES



The cost of sales decreased $134,771 to
$526,321, or 71% of related sales for the three months ended September 30, 2018 compared to $661,092, or 76% of related sales
for the three months ended September 30, 2017.



The 20% decrease in cost of sales of $134,771
is primarily due to the net impact of a 15% decrease in sales of $128,910 and a 6% decrease in the raw material cost of peanuts.
This was offset by a 6% increase in the raw material cost of corn syrup. Due to volatility in the regions where these raw materials
are grown, management anticipates the prices of these raw materials to continue to fluctuate primarily based on supply and demand.



13


Chase General Corporation and SubsidiaryPART I. FINANCIAL INFORMATIONITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS




SELLING EXPENSES



Selling expenses for the three months ended
September 30, 2018 decreased $39,429 to $72,903, which is 10% of sales, compared to $112,332 or 13% of sales for the three
months ended September 30, 2017.



The decrease of $39,429 in selling expenses
for the three months ended September 30, 2018 is primarily due to the adoption of ASC 606, lower sales salaries, shipping charges,
and auto depreciation. With the adoption of ASC 606, the Company no longer includes advertising and bill backs with selling expenses.
The expenses included in selling expenses totaled $29,417 for the three months ended September 30, 2017. As disclosed in Note 1,
adjustments of $19,802 were made to selling expenses for the three months ended September 30, 2018. Sales salaries decreased $5,500
to $23,125 for this period from $28,625 for the three months ended September 30, 2017 primarily due to the retirement of one
of the salespersons. Auto depreciation expense decreased $2,504 to $8,152 for this period from $10,656 for the three months ended
September 30, 2017 primarily due to selling a vehicle in the period ending June 30, 2018. Shipping expense decreased $1,929
to $(334) for this period from $1,595 for the three months ended September 30, 2017 primarily due to actual shipping costs
being less than estimated at year ending June 30, 2018.



GENERAL AND ADMINISTRATIVE EXPENSES



General and administrative expenses for
the three months ended September 30, 2018 decreased $8,552 to $138,484 and increased to 19% of sales, compared to $147,036
or 17% of sales for the three months ended September 30, 2017.



The decreased costs are primarily because
of a decrease in website expense offset by an increase in office salaries. Website expense decreased $10,242 to $4,094 for this
period from $14,336 for the three months ended September 30, 2018 primarily due to redesigning the website for the 100th
anniversary of the Cherry Mash during the period ending September 30, 2017. Office salaries increased $1,797 to $23,105 for this
period from $21,308 for the three months ended September 30, 2018 primarily due to annual raises for employees.



OTHER EXPENSE



Other expense increased by $912 for the
three months ended September 30, 2018 to $2,520 compared to $1,608 for the three months ended September 30, 2017 primarily
due to an increase in interest expense of $905.



INCOME TAX EXPENSE (BENEFIT)



The Company recorded a tax expense for
the three months ended September 30, 2018 of $0 as compared to tax expense of $5,209 for the three months ended September 30,
2017. There is no income tax expense recorded for the three months ended September 30, 2018 primarily due to the net operating
loss carryforward at June 30, 2018 that is available to offset taxable income in the current period.



14


Chase General Corporation and SubsidiaryPART I. FINANCIAL INFORMATIONITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS




NET INCOME (LOSS)



The Company reported a net income for the
three months ended September 30, 2018 of $1,292, compared to net loss of $56,847 for the three months ended September 30,
2017. This increase of $58,139 is explained above



PREFERRED DIVIDENDS



Preferred dividends were $32,018 for the
three months ended September 30, 2018 and 2017, which reflects additional preferred stock dividends in arrears on the Company’s
Series A and Series B $5 par value preferred stock and its Series A and Series B $20 par value preferred stock.



NET LOSS APPLICABLE TO COMMON STOCKHOLDERS



Net loss applicable to common stockholders
for the three months ended September 30, 2018 was $30,726 which is a decrease of $58,139 as compared to the net loss for the
three months ended September 30, 2017 of $88,865.



LIQUIDITY AND CAPITAL RESOURCES



The table below presents the summary of
cash flow for the fiscal year indicated.





|                                          |  | Three Months Ended |         
|----------------------------------------- |  | ------------------ | --------
|                                          |  | September 30       |         
|                                          |  | 2018               |         
|Net Cash Used in Operating Activities     |  | $                  | (321,938
|Net Cash Provided by Financing Activities |  |                    | 320,092 





Management has made no material commitments
for capital expenditures during the remainder of fiscal 2019. The $321,938 of cash used in operating activities is fully detailed
in the condensed consolidated statement of cash flows on page four. The $320,092 of cash provided by financing activities is primarily
due to the receipt of $330,000 drawn from a line-of-credit, net of principal payments on equipment and vehicle loans. The proceeds
from the line-of-credit during the period ended September 30, 2017 were used to finance the buildup of inventories which is reflected
in the cash used in operating activities. At September 30, 2018, the Company had $40,000 remaining on the line-of-credit,
which could be utilized to help fund any working capital requirements. Management expects that projected cash flows will enable
the Company to pay the full balance on the line-of-credit prior to December 31, 2018.



Management believes that the projected
cash flow from operations, combined with its existing cash balances, will be sufficient to meet its funding requirements for the
foreseeable future.



Management believes that inflation will
have only a minimal effect on future operations since such effects will generally be offset by sales price increases, which are
not expected to have a significant effect upon demand.



15


Chase General Corporation and SubsidiaryPART I. FINANCIAL INFORMATIONITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS




CRITICAL ACCOUNTING POLICIES



Forward-Looking Information



This report, as well as our other reports
filed with the Securities and Exchange Commission (SEC), contains forward-looking statements made pursuant to the safe harbor provisions
of The Private Securities Litigation Reform Act of 1995. The words “believe,” “estimate,” “anticipate,”
 “project,” “intend,” “expect,” “plan,” “outlook,” “forecast,”
 “may,” “will,” “should,” “continue,” “predict” and similar expressions
are intended to identify forward-looking statements. This report contains forward-looking statements regarding, among other topics,
our expected financial position, results of operations, cash flows, strategy, and management’s plans and objectives. Accordingly,
these forward-looking statements are based on assumptions about a number of important factors. While we believe that our assumptions
about such factors are reasonable, such factors involve risks, and uncertainties that could cause actual results to be different
from what appear here. These risk factors include: the ability to adequately pass through customers unanticipated future increases
in raw material costs, decreased demand for products, expected orders that do not occur, loss of key customers, the impact of competition
and price erosion as well as supply and manufacturing constraints, and other risks and uncertainties. In light of these risks and
uncertainties, there can be no assurance that the forward-looking information contained in this report will prove accurate, and
our actual results may differ materially from these forward-looking statements. We assume no obligation to update any forward-looking
statements made herein.



16









Chase General
Corporation and Subsidiary

PART I.
FINANCIAL INFORMATION



| | ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
| | ------- | ----------------------------------------------------------



Not applicable to a smaller reporting
company.



| | ITEM 4. | CONTROLS AND PROCEDURES
| | ------- | -----------------------



(a) Evaluation of Disclosure Controls
and Procedures



Our management, with the participation of the Chief Executive Officer
and Chief Financial Officer of the Company, has evaluated the effectiveness of Chase's disclosure controls and procedures,
as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the Exchange Act), as of the end of
the period covered by this report. Based on such evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the Company's disclosure controls and procedures were not effective as of September 30, 2018, as a result of the material
weakness discussed below.



A material weakness is
a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a
reasonable possibility that a material misstatement of the Company's annual or interim consolidated financial statement will
not be prevented or detected on a timely basis. In connection with the preparation of our consolidated financial statements
for the period ending September 30, 2018, we identified a material weakness in our internal control over financial reporting
related to our controls in the method used to estimate the ending inventory balances. This control
deficiency resulted in a material adjustment to our ending inventory balance for the period ending September 30, 2018. If
not remediated, this control deficiency could result in future material misstatement to inventory and cost of goods sold
within the Company's consolidated financial statements.



Management and the Board of Directors are committed to the continued improvement of the Company's overall system of internal
control over financial reporting. Management believes the remediation measures described below will remediate the identified
control deficiency and strengthen the Company's internal control over financial reporting.



Management will implement the following measures to remediate the internal control deficiency with respect to its valuation
of inventory.



| | • | Management will implement new internal controls to calculate and review the estimated ending
                                                                                      inventory                                                                                       balances
                                                                                      using                                                                                                             the
                                                                                      retail                                                                                       inventory
                                                                                      method on a                                                                                                  monthly basis;
                                                                                      while, also                                                                                        using an external
                                                                                      vendor for                                                                                       verification of the
                                                                                      calculation.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



(b) Changes in Internal Control over
Financial Reporting



There were no changes in the Company's internal control over financial
reporting during the quarter ended September 30, 2018 that have materially affected, or are reasonably likely to materially
affect, the Company's internal control over financial reporting.



17









Chase General
Corporation and Subsidiary

PART II.
OTHER INFORMATION



| | ITEM 1. | LEGAL PROCEEDINGS
| | ------- | -----------------



None.



| | ITEM 1A. | RISK FACTORS
| | -------- | ------------



Not applicable to a smaller
reporting company.



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



None



| | ITEM 3. | DEFAULTS UPON SENIOR SECURITIES
| | ------- | -------------------------------



| | a. | None
| | -- | ----



| | b. | The total cumulative preferred stock dividends contingency at September 30, 2018 is $8,236,968.
| | -- | -----------------------------------------------------------------------------------------------



| | ITEM 4. | MINE SAFETY DISCLOSURES
| | ------- | -----------------------



Not applicable.



| | ITEM 5. | OTHER INFORMATION
| | ------- | -----------------



None



| | ITEM 6. | EXHIBITS
| | ------- | --------



|Exhibit 31.1 |  | Certification of Chief Executive Officer and Financial Officer Pursuant to Rules 13A-14(A) and 15D-14(A) Under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|             |  |                                                                                                                                                                                                                          
|Exhibit 32.1 |  | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                           



18







SIGNATURES



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



|                  | Chase General Corporation
    and Subsidiary      
|----------------- | --------------------------------------------------
|                  | (Registrant)                                      
|                  |                                                   
|                  |                                                   
|                  |                                                   
|February 14, 2019 | /s/
    Barry M. Yantis                           
|Date              | Barry M. Yantis                                   
|                  | Chairman of the Board, Chief Executive Officer and
|                  | Chief Financial Officer, President, and Treasurer 



19