##### Table of Contents





United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-K







|x | Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ------------------------------------------------------------------------------------

For the Fiscal Year Ended June 30, 2010



| ̈ | Transaction Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | -----------------------------------------------------------------------------------------

For transition period from              to

Commission File Number: 2-5916





Chase General Corporation

(Exact name of registrant as specified in its charter)







|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Missouri                                                       |  | 36-2667734                             
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification Number)



|                                         |  |         
|---------------------------------------- |  | --------
|1307 South 59th, St. Joseph, Missouri    |  | 64507   
|(Address of Principal Executive Offices) |  | Zip Code

(816)
279-1625

(Registrants telephone number, including area code)





Securities Registered Pursuant to Section 12(b) of the Act:

None

Securities Registered Pursuant to Section 12(g) of the Act:

None

(Title of Class)





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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) 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

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



|                        |  |   |  |                           |  |  
|----------------------- |  | - |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈ |  | Accelerated filer         |  |  ̈
|                        |  |   | 
|Non-accelerated filer   |  |  ̈ |  | Smaller reporting company |  | x

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

The aggregate market value of the shares of common stock held by non-affiliates of the Issuer is not actively traded. Therefore, market
value of the stock is unknown as of 60 days prior to the date of this filing.

As of September 15, 2010 there were 969,834
shares of Common Stock $1.00 par value, outstanding.









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CHASE GENERAL CORPORATION

ANNUAL REPORT ON FORM 10-K

For the Year Ended June 30, 2010

TABLE OF CONTENTS



|           |  |                                                                                                              |  |   
|---------- |  | ------------------------------------------------------------------------------------------------------------ |  | --
|PART I     |  |                                                                                                              |  |   
|Item 1.    |  | Business                                                                                                     |  | 3 
|Item 1A.   |  | Risk Factors                                                                                                 |  | 6 
|Item 1B.   |  | Unresolved Staff Comments                                                                                    |  | 6 
|Item 2.    |  | Property                                                                                                     |  | 7 
|Item 3.    |  | Legal Proceedings                                                                                            |  | 7 
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                                          |  | 7 
|           |  |                                                                                                             
|PART II    |  |                                                                                                              |  |   
|Item 5.    |  | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |  | 8 
|Item 6.    |  | Selected Financial Data                                                                                      |  | 8 
|Item 7.    |  | Managements Discussion and Analysis of Financial Conditions and Results of Operations                       |  | 9 
|Item 7A.   |  | Quantitative and Qualitative Disclosures About Market Risk                                                   |  | 16
|Item 8.    |  | Consolidated Financial Statements and Supplementary Data                                                     |  | 16
|Item 9.    |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                         |  | 36
|Item 9A(T) |  | Controls and Procedures                                                                                      |  | 36
|Item 9B.   |  | Other Information                                                                                            |  | 36
|           |  |                                                                                                             
|PART III   |  |                                                                                                              |  |   
|Item 10.   |  | Directors, Executive Officers, and Corporate Governance                                                      |  | 37
|Item 11.   |  | Executive Compensation                                                                                       |  | 38
|Item 12.   |  | Security Ownership of Certain Beneficial Owners and Management                                               |  | 40
|Item 13.   |  | Certain Relationships and Related Transactions, and Director Independence                                    |  | 41
|Item 14.   |  | Principal Accountant Fees and Services                                                                       |  | 41
|           |  |                                                                                                             
|PART IV    |  |                                                                                                              |  |   
|Item 15.   |  | Exhibits and Financial Statement Schedules                                                                   |  | 42
|SIGNATURES |  | 43                                                                                                          



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PART I

This report contains certain forward-looking statements concerning the Companys operations, economic performance and
financial condition, which are subject to inherent uncertainties and risks. Actual results could differ materially from those anticipated in this report. When used in this report, the word estimate, project,
anticipate, expect, intend, believe, and similar expressions are intended to identify forward-looking statements.



|Item 1 | BUSINESS
|------ | --------

Chase General
Corporation was incorporated November 6, 1944 for the purpose of manufacturing confectionery products. In 1970 Chase General Corporation acquired a 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 the reporting entity.

PRINCIPAL PRODUCTS AND SERVICES AND METHODS OF DISTRIBUTION

The subsidiary, Dye Candy 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. The products of both divisions 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, segment reporting for the two divisions is not maintained by
Management and, accordingly, is not available for inclusion in this filing.

The principal products produced are as follows:

Chase Candy Products of Dye Candy Company produces a candy bar under the trade name of Cherry Mash. The bar
is distributed in six case sizes:

(1) 60 count pack

(2) 12 boxes of 24 bars per box

(3) 200 count shipper box

(4) 100 count shipper box

(5) 100 # 2 box Counter Display

(6) 4 box - 36 count Counter Display

In addition to the regular size bar, a mini-mash is distributed in seven case sizes:

(1) 24 - 12 oz. bags

(2) 6 jars - 60 bars per jar

(3) 23 # wrapped bars

(4) 22 # unwrapped bars

(5) 12 - 12 oz. bags

(6) 6 - 4 # jars

(7) 24 - 12 oz. clamshell containers



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DESCRIPTION OF BUSINESS (CONTINUED)

Seasonal Candy Products 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) Peanut Clusters      |  | 
|                         |  |                         
|(3) Home Style Poe Fudge |  | (8) Champion Crème Drops |  | 
|                         |  |                         
|(4) Peco Flake           |  | (9) Jelly Candies        |  | 
|                         |  |                         
|(5) Peanut Squares       |  |                          |  | 

The Creme Drops and Jelly Candies are not produced by the Company, but repackaged for wholesale
distribution.

All products are shipped to customers by commercial haulers.

COMPETITION AND MARKET AREA

The Chase Candy Division bars are sold primarily to wholesale candy and tobacco jobbing houses, grocery accounts, vendors and repackers.
Cherry Mash bars are marketed in the Midwest region of the United States. For the years ended June 30, 2010 and 2009, this division accounted for 58% and 59%, respectively, of the consolidated revenue of Dye Candy Company.

The Seasonal Candy Division is sold primarily on a Midwest regional basis to national syndicate accounts, repackers, and
grocery accounts. For the years ended June 30, 2010 and 2009, the division accounted for 42% and 41%, respectively, of the consolidated revenue of Dye Candy Company.

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

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.

Due to
the seasonal nature of the business, there is a heavier demand on working capital in the winter and summer 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.

(Continued)



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COMPETITION AND MARKET AREA(CONTINUED)

Prompt, efficient service are traits demanded in the confectionery industry, which results 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.

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 Crown Candy Company, Vermico Candy Company, and the Seasonal Candy Division of Dye Candy Company with approximately 70%
of the market share among them. In the United States Old Dominion has approximately 80% of the market share of the peanut candy business in which the Seasonal Candy Division operates. Dye Candy Company sells approximately 95% 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.
Dye Candy Companys market share in the coconut industry does not vary significantly from year to year.

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 of experience associated with its name.

RESEARCH AND DEVELOPMENT

The Company has not developed any new products during fiscal years ending June 30, 2010 and 2009.

RAW MATERIALS AND PRINCIPAL SUPPLIERS

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.

PATENTS AND TRADEMARKS

The largest single revenue producing product, the Cherry Mash bar, is protected by a trademark registered with the United
States Government Patents Office. The Company considers this trademark very important to the Company. This trademark expires in the year 2013. The Company and its legal representatives do not expect any impediment to renewing this trademark prior to
its expiration.



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EMPLOYEES

As of June 30, 2010, the Company had 19 full time employees and one through a temporary agency. There were 13 in
manufacturing, 2 in maintenance, 11/2in sales and
marketing and 31/2in finance and administration.
This expands to approximately 31 full time personnel during the two busy production seasons of spring and fall.

CUSTOMERS

For the years ending June 30, 2010 and 2009, Associated Wholesale Grocers accounted for 22% and 27% of gross sales, and 8% and 18%,
respectively, of accounts receivable. For the years ending June 30, 2010 and 2009, Wal-Mart and its affiliates accounted for 17% each year of gross sales, and 44% and 31%, respectively, of accounts receivable. No other customer accounted for
more than 10% of the Companys revenues in fiscal years 2010 and 2009.

ENVIRONMENTAL PROTECTION AND THE EFFECT ON
PROBABLE GOVERNMENT REGULATIONS ON THE BUSINESS

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.

NEED FOR GOVERNMENT APPROVAL OF PRINCIPAL PRODUCTS OR SERVICES

The Company is required to meet the FDA guidelines for proper labeling of its products and for contents of its products.

REPORTS TO SECURITY HOLDERS

The Registrant is not required to send the annual audit report, annual 10-K report and quarterly 10-Q reports to security holders since
the stock is not actively traded. These reports are available at the Registrants registered office or they are available on-line on the SECs EDGAR website.



|Item 1A | RISK FACTORS
|------- | ------------

Not
applicable to smaller reporting company.



|Item 1B | UNRESOLVED STAFF COMMENTS
|------- | -------------------------

The Company has not received SEC staff comments on a periodic report more than 180 days before its year-end.



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|Item 2 | PROPERTY
|------ | --------

We conduct our
operations from two buildings as follows:

Chase Warehouse - This building located in St. Joseph, Missouri is owned by
Dye Candy Company, a wholly-owned subsidiary of the registrant. The facility is currently devoted entirely to the storage of supplies, and the warehousing and shipping of candy products. This warehouse is over seventy years old and is in fair
condition and adequate to meet present requirements. The warehouse has approximately 15,000 square feet and is not encumbered.

Chase General Office and Dye Candy Company Operating Plant - The building located at 1307 South
59th, St. Joseph, Missouri contains the general offices
(of approximately 2,000 square feet) for Chase General Corporation, Dye Candy Company and its divisions. The production plant of Dye Candy Company occupies the remainder of the building or 18,000 square feet. The building, specifically designed for
the Company, is leased from an entity owned by the Vice-President and Director of the Company and his spouse. The annual rental of this facility was $78,000 for each year ended June 30, 2010 and 2009.

The net book value of our premises, land and office, and production equipment was $512,069 and $328,482, respectively, for fiscal years
ending June 30, 2010 and 2009.

We believe both facilities are adequately covered by insurance.



|Item 3 | LEGAL PROCEEDINGS
|------ | -----------------

None



|Item 4 | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|------ | ---------------------------------------------------

No matters were submitted to a vote of the Companys security holders during the fourth quarter of the fiscal year ended
June 30, 2010.



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PART II



|Item 5 | MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|------ | ---------------------------------------------------------------------------------------------------------------

Market information

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

Security holders

As of September 15, 2010, the latest practicable date, the approximate number of record holders of common stock was 1,869, including
individual participants in security listings.

Dividends



| | (1) | Dividend history and restrictions
| | --- | ---------------------------------

No dividends have been paid during the past two fiscal years and there are no dividend restrictions. Preferred stock dividends in arrears
are accumulated.



| | (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.

Securities authorized for issuance under equity compensation plans

The Company does not have any equity compensation plans.



|Item 6 | SELECT FINANCIAL DATA
|------ | ---------------------

Not applicable to a smaller reporting company.



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|Item 7 | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
|------ | --------------------------------------------------------------------------------------

FORWARD-LOOKING STATEMENTS

This report contains statements that plan for or anticipate the future. Forward-looking statements may include statements about the future
of our products and the industry, statements about our future business plans and strategies, and other statements that are not historical in nature. In this report, forward-looking statements are generally identified by the words
anticipate, plan, believe, expect, estimate, and the like. Readers should carefully review these cautionary statements as they identify certain important factors that could cause actual
results to differ materially from those in the forward-looking statements and from historical trends. These forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by the Company
at the time the statements are made. These expectations, assumptions and uncertainties include: the Companys expectation of heavier demand on working capital in the summer and winter months in anticipation of fall and spring sales; our belief
that the Company has stabilized its customer base; will continue our efforts to expand the existing market area and increase sales to customers; and maintain tight control of all expenditures.

OVERVIEW

During fiscal year ended 2010, the Companys net sales were $2,940,935 for fiscal year ended June 30, 2010, as compared to net
sales of $3,101,004 for fiscal year ended June 30, 2009. This 5.1% decrease in volume resulted in decreased profitability during the year, as reflected in net income before income taxes of $177,817 for fiscal year 2010 compared to $230,708 for
fiscal year 2009. Working capital increased $101,818 to $543,071 for the current year from $441,253 for the fiscal year 2009 due to increases in cash and inventory, and a decrease in accounts payable.

The following information should be read together with the consolidated financial statements and notes thereto included elsewhere herein.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

GENERAL

Managements discussion and analysis of financial condition and results of operations are based upon the Companys consolidated
financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The preparation of these consolidated financial statements requires the Company to
make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions
or conditions.



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GENERAL(CONTINUED)

The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the
preparation of its consolidated financial statements.

REVENUE RECOGNITION

The Company recognizes revenues as product is shipped to the customers. Net sales are comprised of the total sales billed during the
period less the estimated returns, customer allowances, and customer discounts.

RECEIVABLES

Accounts receivable are uncollateralized customer obligations which generally require payment within thirty days from the invoice date.
Accounts receivable are stated at the invoice amount as no interest is charged to the customer for any past due amounts. Payments of accounts receivable are applied to the specific invoices identified on the customers remittance advice or, if
unspecified, to the earliest unpaid invoices.

The carrying amount of accounts receivable is reduced by a valuation allowance
that reflects managements best estimate of amounts that will not be collected. The allowance for doubtful accounts is based on managements assessment of the collectability of specific customer accounts and the aging of the accounts
receivable. If there is a deterioration of a major customers credit worthiness or actual defaults are higher than the historical experience, managements estimates of the recoverability of amounts due the Company could be adversely
affected. All accounts or portions thereof deemed to be uncollectible, or to require an excessive collection cost, are written off to the allowance for doubtful accounts.

INVENTORIES

Inventories are carried at the lower of cost or market value, with cost being determined on the first-in,
first-out basis of accounting. Finished goods and goods in process include a provision for manufacturing overhead.

IMPAIRMENT OF LONG-LIVED ASSETS

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets
may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amounts of such assets to future net cash flows expected to be generated by the assets. If such assets are considered to be impaired,
the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceed the fair value of the assets.



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RESULTS OF OPERATIONS

The following table sets forth for the years indicated, the percentage of net sales of certain items in the Companys consolidated
statements of operations for each of the fiscal years ended June 30, 2010 and 2009, respectively:



|                                                |  |        |    |  |        |  
|----------------------------------------------- |  | ------ | -- |  | ------ | -
|                                                |  | 2010   |    |  | 2009   |  
|Net sales                                       |  | 100.00 | %  |  | 100.00 | %
|Cost of sales                                   |  | 71.70  |    |  | 70.63  |  
|                                                |  |        |    |  |        |  
|Gross profit                                    |  | 28.30  |    |  | 29.37  |  
|Selling expense                                 |  | 11.13  |    |  | 11.89  |  
|General and administrative expense              |  | 10.99  |    |  | 10.29  |  
|                                                |  |        |    |  |        |  
|Income from operations                          |  | 6.18   |    |  | 7.19   |  
|Other income (expense), net                     |  | (.13   | )  |  | .25    |  
|                                                |  |        |    |  |        |  
|Income before income taxes                      |  | 6.05   |    |  | 7.44   |  
|Provision for (benefit from) income taxes       |  | 2.41   |    |  | 1.24   |  
|                                                |  |        |    |  |        |  
|Net income                                      |  | 3.64   |    |  | 6.20   |  
|Preferred dividends                             |  | (4.35  | )  |  | (4.13  | )
|                                                |  |        |    |  |        |  
|                                                |  |       
|Income (loss) applicable to common stockholders |  | (.71   | )% |  | 2.07   | %
|                                                |  |        |    |  |        |  

FISCAL YEAR 2010 COMPARED TO FISCAL YEAR 2009

NET SALES

During the year ended June 30, 2010, sales, net of returns and allowances, decreased 5.2% as compared to the year ended June 30,
2009. Gross sales for Chase Candy products decreased $128,586 or 6.94% to $1,724,959 for the year ended June 30, 2010 compared to $1,853,545 for 2009. Gross sales for seasonal candy decreased $42,934 or 3.31% for the year ended June 30,
2010 to $1,253,258 compared to $1,296,192 for 2009.

The 5.4% decrease in net sales of $160,069 for the year ended
June 30, 2010, over the same period ended June 30, 2009, was due to several factors. Increased competition from national brands and sales reductions of two key customers, that contributed to an overall decrease. In addition, there was a
timing issue where June 2009 sales were not repeated until July 2010. The seasonal candy had improved merchandising displays at customer retail locations but also had the loss of approximately $90,000 in sales to a major customer, while selling
approximately $44,000 sales to a new customer, which resulted in sales declines overall.

The Companys returns and
allowances decreased $16,951 or 25.4% for the year ended June 30, 2010, compared to the year ended June 30, 2009.



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COST OF SALES

Cost of sales for the year ended June 30, 2010, as compared to the year ended June 30, 2009, decreased by 3.72%. The cost of
sales decreased $81,430 to $2,108,743 while increasing to 71.70% of related revenues for the year ended June 30, 2010, compared to $2,190,173 or 70.63% of related revenues for the year ended June 30, 2009.

The dollar decrease in cost of sales for the year ended June 30, 2010 was the result of raw material costs of $967,413 decreasing
13.75% or $154,161 for year ended June 30, 2010, as compared to $1,121,574 for year ending 2009. This decrease is a direct result of a reduction in production and limited raw material price increases.

Labor costs including wages, vacation pay and payroll taxes of $433,663 for the year ended June 30, 2010 increased 6.1% or $24,974 as
compared to $408,689 for the period ending 2009. Included in the increase was a $10,000 bonus award to a long-time retiring employee.

In addition, new transportation vendors were used which resulted in a decrease of $28,855 or 15.71% in freight costs from $154,824 for the
year ended June 30, 2010 as compared to $183,679 for the year ended June 30, 2009.

GROSS PROFIT

The gross margin decreased 8.63% or $78,639 to $832,192 decreasing to 28.3% of related revenues for the year ended June 30, 2010, as
compared to $910,831 or 29.37% of related revenues for the year ended June 30, 2009, as a result of the overall net decrease in net sales over cost of sales.

Finished goods inventory as of June 30, 2010 of $104,022 decreased $15,094 or 12.67% of the June 30, 2009 finished goods
inventory of $119,116. Raw material inventory of $109,027 and packaging materials inventory of $186,420 is 21.72% higher than the June 30, 2009 inventories of $69,960 and $172,764, respectively, as a result of continuing to purchase inventory
at competitive prices for the forthcoming busy season that starts September 1, 2010.

SELLING EXPENSES

Selling expenses for the year ended June 30, 2010 decreased $41,329 to $327,413, which is 11.13% of sales, compared to $368,742 or
11.89% of sales for the year June 30, 2009. This decrease is primarily due to lower commissions being paid as a result of decreased sales along with decreased sample costs and premium promotions for this period. Commissions, sample costs, and
premium promotions decreased 25.23% to $154,828 for year ended June 30, 2010, as compared to $207,062 for year ending June 30, 2009.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses for the year ended June 30, 2010 increased $4,183 to $323,221, which is 10.99% of sales, compared
to $319,038 or 10.29% of sales for the year ended June 30, 2009. The increased costs are primarily because of an increase in employee health and directors insurance.



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##### Table of Contents

INCOME FROM OPERATIONS

Income from operations for the year ended June 30, 2010 is 6.18% of net sales, as compared to 7.19% of net sales for the year ended
June 30, 2009 for the reasons described above.

OTHER INCOME (EXPENSE)

Other income and (expense) reflects expense of $(3,742) for the year ended June 30, 2010, as compared to income of $7,657 for the
year ended June 30, 2009. This decrease of $11,399 was primarily due to a gain from sale of automobiles of $12,014 reported for the year ended June 30, 2009 and didnt repeat for fiscal year 2010.

INCOME BEFORE INCOME TAXES

Income before income taxes was $177,816 for the year ended June 30, 2010, as compared to $230,708 for the year ended June 30,
2009. The reasons for the decrease of $52,892 have been discussed above.

PROVISION FOR INCOME TAXES

The Company recorded a tax expense for the year ended June 30, 2010 of $70,867, as compared to a tax expense of $38,459 for the year
ended June 30, 2009. The tax expense for the year ended June 30, 2010 is a result of operations discussed above. The Company had incurred losses for 2008 and 2007, which were not available to carryback to obtain previously paid income
taxes. This loss carryforward was utilized against taxable income for the year ended June 30, 2009.

NET INCOME

Net income for the year ended June 30, 2010 was $106,949, compared to net income for year ended June 30, 2009 of
$192,249. This decrease of $85,300 is the result of those items discussed above.

PREFERRED DIVIDENDS

Preferred dividends were $128,072 for the years ended June 30, 2010 and 2009, which reflect additional preferred stock dividends in
arrears on the Companys Series A and Series B $5 par value preferred stock and its Series A & B $20 par value preferred stock.

NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS

Net (loss) applicable to common stockholders was $(21,123) for the year ended June 30, 2010, which is a decrease of $85,300 as
compared to net income of $64,177 for the year ended June 30, 2009 for the reasons discussed above.



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LIQUIDITY AND SOURCES OF CAPITAL

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



|                                                    |  |      |          |   |      |   |          |  
|--------------------------------------------------- |  | ---- | -------- | - | ---- | - | -------- | -
|                                                    |  | 2010 |          |   | 2009 |  
|Net cash provided by operating activities           |  | $    | 203,958  |   |      | $ | 267,690  |  
|Net cash used in investing activities               |  | $    | (260,770 | ) |      | $ | (52,198  | )
|Net cash provided by (used in) financing activities |  | $    | 134,549  |   |      | $ | (210,829 | )

Operating Activities

The positive cash flow of $203,958 generated from operations is a result of the Company continuing to monitor raw material
pricing, and when a price increase or decrease is anticipated, adjustments to inventory levels are made accordingly. Raw materials inventory increased $39,067 from June 30, 2009 to June 30, 2010. The current year increase can be attributed
to the efforts of the Company watching markets for these commodities, and making purchases at more favorable prices prior to the start of busy season.

Packaging materials are purchased in large volumes and carried for several years due to the high cost from suppliers to cut dies and print
materials. Therefore, when supplier pricing remains consistent over the years and is not predicted to increase, the Company utilizes its present inventory supply without making additional purchases necessary to lock in pricing. Packaging materials
inventory increased $13,656 at June 30, 2010 from June 30, 2009.

Finished goods inventory decrease $15,094 from
June 30, 2009 to June 30, 2010. This decrease was due to lower customer orders at the end of fiscal year June 30, 2010 than at the end of fiscal year June 30, 2009. Goods in process remained comparable to prior years.

Investing Activities

The $260,770 of cash used in investing activities was the result of net capital expenditures and disposal of equipment for the current
fiscal year. The Company continues to write off equipment that is no longer useful to the operations of the Company. Purchases of $260,771 of machinery and equipment and $137,473 were made during the years ended June 30, 2010 and 2009,
respectively. Depending on results of operations and cash flows, the Company is hoping to replace two cookers at an anticipated cost of $40,000 in the next several years, with no set target date. Equipment purchased for the current year includes the
acquisition of a new mini mash wrapper machine for $249,161.

Financing Activities

The Company borrowed $210,000 and $145,000, respectively, on its line-of-credit during the fall of 2009 and 2008 busy seasons. Payments of
$210,000 and $195,000, respectively, were paid for years ending June 30, 2010 and 2009. The Company renewed its $250,000 line-of-credit until January 3, 2011.

The Company financed $163,909, a portion of the mini mash wrapper machine acquired during fiscal year 2010.



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LIQUIDITY AND SOURCES OF CAPITAL(CONTINUED)

Vehicle loan payments were $29,360 and $20,829 for years ended June 30, 2010 and 2009, respectively.

Overall cash and cash equivalents increased $77,737 to $106,508 at June 30, 2010 from $28,771 at June 30, 2009.

To date, there are no material commitments by the Company for capital expenditures. At June 30, 2010, the Companys accumulated
deficit was $5,640,047, compared to accumulated deficit of $5,780,006 as of June 30, 2009. Working capital as of June 30, 2010 increased 23.07% to $543,071 from $441,253 as of June 30, 2009.

The Companys lease on its office and plant facility is effective through March 31, 2025 with an option to extend for an
additional time of five years, and currently requires payments of $6,500 per month. At the end of the first five years, the base rent shall be increased an amount not greater than 30%, at the sole discretion of lessor and for each additional term of
five years. The facility is leased from an entity owned 100% by the Vice-President and Director and his spouse.

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 two fiscal years.

IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS

Pursuant to SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles  a replacement of FASB Statement No. 162, the FASB Accounting Standards Codification (ASC) (FASB ASC 105) became the sole source of authoritative U.S. GAAP for interim and annual periods ending after
September 15, 2009, except for rules and interpretive releases of the SEC, which are sources of authoritative GAAP for SEC registrants. The Company adopted this standard during the first quarter of 2009. Reference to specific accounting
standards in the footnotes to our consolidated financial statements have been changed to refer to the appropriate section of the ASC.

During the third quarter, Chase adopted FASB accounting Standards Update (ASU) No. 2010-09, Amendments to Certain Recognition and
Disclosure Requirements, which amends ASC 855, Subsequent Events. This ASU removes the requirement for an SEC filer to disclose a date through which subsequent events have been evaluated. This change removes potential conflicts with SEC
requirements. Because this update affects the disclosure and not the accounting treatment for subsequent events, the adoption of this provision did not have a material impact on the Companys consolidated financial statements.



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IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS(CONTINUED)

During the third quarter, Chase adopted FASB ASU No. 2010-06 Fair Value Measurements and Disclosures (Topic 820). This ASU requires
new disclosures for transfers in and out of Levels 1 and 2, and Activity in Level 3 fair value measurements. The update also clarifies the level disaggregation and disclosures about inputs and valuation techniques. The new disclosures and
clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009. The requirement related to Level 3 fair value measurements is effective for the Company for interim and annual
reporting periods beginning after January 29, 2011. The adoption of the effective portions of this new standard did not have a material impact to the Companys consolidated financial statements and the Company does not expect a material
impact to its consolidated financial statements related to the Level 3 fair value disclosures.

In June 2009, the FASB issued
new guidance on the consolidation of variable interest entities (VIE) in response to concerns about the application of certain key provisions of pre-existing guidance, including those regarding the transparency of the involvement with a
VIE. Specifically, this new guidance requires a qualitative approach to identifying a controlling financial interest in a VIE and requires ongoing assessment of whether an entity is a VIE and whether an interest in a VIE makes the holder the primary
beneficiary of the VIE. In addition, this new guidance requires additional disclosures about the involvement with a VIE and any significant changes in risk exposure due to that involvement. This new guidance is effective for fiscal years beginning
after November 15, 2009. We plan to adopt the new guidance in fiscal year 2011 and the Company is currently evaluating the impact of adopting the standard on its consolidated financial statements.



|Item 7A | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------

Not applicable to a smaller reporting company.



|Item 8 | CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|------ | --------------------------------------------------------

The Consolidated Financial Statements meeting the requirements of Regulation S-B are contained on pages 17 through 35 of this Form 10-K.



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CHASE GENERAL CORPORATION AND SUBSIDIARY

CONSOLIDATED FINANCIAL REPORT

Table of Contents



|                                                         |  |     
|-------------------------------------------------------- |  | ----
|                                                         |  | PAGE
|Reports of Independent Registered Public Accounting Firm |  | 18  
|                                                         | 
|Financial Statements                                     |  |     
|                                                         | 
|Consolidated Balance Sheets                              |  | 19  
|                                                         | 
|Consolidated Statements of Operations                    |  | 21  
|                                                         | 
|Consolidated Statements of Stockholders Equity          |  | 22  
|                                                         | 
|Consolidated Statements of Cash Flows                    |  | 23  
|                                                         | 
|Notes to Consolidated Financial Statements               |  | 25  



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

CHASE GENERAL CORPORATION AND SUBSIDIARY



|                            
|----------------------------
|/s/ Mayer Hoffman McCann P.C
|MAYER HOFFMAN MCCANN P.C.   
|                            
|Leawood, Kansas             
|September 23, 2010          



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CHASE GENERAL CORPORATION AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

June 30, 2010 and 2009

ASSETS



|                                                                                      |  |      |           |      |   |          
|------------------------------------------------------------------------------------- |  | ---- | --------- | ---- | - | ---------
|                                                                                      |  | 2010 |           | 2009
|CURRENT ASSETS                                                                        |  |      |           |      |   |          
|Cash and cash equivalents                                                             |  | $    | 106,508   |      | $ | 28,771   
|Receivables                                                                           |  |      |           |      |   |          
|Net of allowance for doubtful accounts of $14,891 and $15,736, respectively (Note 12) |  |      | 164,753   |      |   | 229,909  
|Inventories:                                                                          |  |      |           |      |   |          
|Finished goods                                                                        |  |      | 104,022   |      |   | 119,116  
|Goods in process                                                                      |  |      | 3,730     |      |   | 4,932    
|Raw materials                                                                         |  |      | 109,027   |      |   | 69,960   
|Packaging materials                                                                   |  |      | 186,420   |      |   | 172,764  
|Prepaid expenses                                                                      |  |      | 4,959     |      |   | 16,858   
|Deferred income taxes (Note 7)                                                        |  |      | 5,844     |      |   | 4,626    
|                                                                                      |  |      |           |      |   |          
|                                                                                      |  |     
|Total current assets                                                                  |  |      | 685,263   |      |   | 646,936  
|                                                                                      |  |      |           |      |   |          
|                                                                                      |  |     
|PROPERTY AND EQUIPMENT                                                                |  |      |           |      |   |          
|Land                                                                                  |  |      | 35,000    |      |   | 35,000   
|Buildings                                                                             |  |      | 85,738    |      |   | 85,738   
|Machinery and equipment                                                               |  |      | 1,029,093 |      |   | 771,330  
|Trucks and autos                                                                      |  |      | 139,601   |      |   | 139,601  
|Office equipment                                                                      |  |      | 37,027    |      |   | 36,471   
|Leasehold improvements                                                                |  |      | 71,481    |      |   | 71,481   
|                                                                                      |  |      |           |      |   |          
|Total                                                                                 |  |      | 1,397,940 |      |   | 1,139,621
|Less accumulated depreciation                                                         |  |      | 885,871   |      |   | 811,139  
|                                                                                      |  |      |           |      |   |          
|                                                                                      |  |     
|Total property and equipment                                                          |  |      | 512,069   |      |   | 328,482  
|                                                                                      |  |      |           |      |   |          
|                                                                                      |  |     
|TOTAL ASSETS                                                                          |  | $    | 1,197,332 |      | $ | 975,418  
|                                                                                      |  |      |           |      |   |          

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



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CHASE GENERAL CORPORATION AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

June 30, 2010 and 2009

LIABILITIES AND STOCKHOLDERS EQUITY



|                                                                          |  |      |            |   |      |   |            |  
|------------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | -
|                                                                          |  | 2010 |            |   | 2009 |  
|CURRENT LIABILITIES                                                       |  |      |            |   |      |   |            |  
|Accounts payable                                                          |  | $    | 68,734     |   |      | $ | 158,570    |  
|Current maturities of notes payable (Note 3 & 4)                          |  |      | 56,820     |   |      |   | 30,142     |  
|Accrued expenses                                                          |  |      | 15,337     |   |      |   | 15,487     |  
|Deferred income (Note 2)                                                  |  |      | 1,299      |   |      |   | 1,299      |  
|Income tax payable                                                        |  |      | 2          |   |      |   | 185        |  
|                                                                          |  |      |            |   |      |   |            |  
|                                                                          |  |     
|Total current liabilities                                                 |  |      | 142,192    |   |      |   | 205,683    |  
|                                                                          |  |      |            |   |      |   |            |  
|                                                                          |  |     
|LONG-TERM LIABILITIES                                                     |  |      |            |   |      |   |            |  
|Deferred income (Note 2)                                                  |  |      | 17,857     |   |      |   | 19,155     |  
|Notes payableless current maturities (Note 3)                            |  |      | 150,475    |   |      |   | 42,604     |  
|Deferred income taxes (Note 7)                                            |  |      | 93,869     |   |      |   | 21,986     |  
|                                                                          |  |      |            |   |      |   |            |  
|                                                                          |  |     
|Total long-term liabilities                                               |  |      | 262,201    |   |      |   | 83,745     |  
|                                                                          |  |      |            |   |      |   |            |  
|                                                                          |  |     
|Total liabilities                                                         |  |      | 404,393    |   |      |   | 289,428    |  
|                                                                          |  |      |            |   |      |   |            |  
|                                                                          |  |     
|COMMITMENTS AND CONTINGENCIES (NOTE 10)                                   |  |      |            |   |      |   |            |  
|                                                                          |  |     
|STOCKHOLDERS EQUITY                                                      |  |      |            |   |      |   |            |  
|Capital stock issued and outstanding: (Note 6)                            |  |      |            |   |      |   |            |  
|Prior cumulative preferred stock, $5 par value:                           |  |      |            |   |      |   |            |  
|Series A (liquidation preference $2,070,000 and $2,040,000, respectively) |  |      | 500,000    |   |      |   | 500,000    |  
|Series B (liquidation preference $2,025,000 and $1,995,000, respectively) |  |      | 500,000    |   |      |   | 500,000    |  
|Cumulative preferred stock, $20 par value:                                |  |      |            |   |      |   |            |  
|Series A (liquidation preference $4,726,533 and $4,668,001, respectively) |  |      | 1,170,660  |   |      |   | 1,170,660  |  
|Series B (liquidation preference $770,281 and $760,741, 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                                                       |  |      | (5,673,057 | ) |      |   | (5,780,006 | )
|                                                                          |  |      |            |   |      |   |            |  
|                                                                          |  |     
|Total stockholders equity                                                |  |      | 792,939    |   |      |   | 685,990    |  
|                                                                          |  |      |            |   |      |   |            |  
|                                                                          |  |     
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                |  | $    | 1,197,332  |   |      | $ | 975,418    |  
|                                                                          |  |      |            |   |      |   |            |  

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



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CHASE GENERAL CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended June 30, 2010 and 2009



|                                                       |  |      |           |   |      |   |           |  
|------------------------------------------------------ |  | ---- | --------- | - | ---- | - | --------- | -
|                                                       |  | 2010 |           |   | 2009 |  
|NET SALES (NOTE 12)                                    |  | $    | 2,940,935 |   |      | $ | 3,101,004 |  
|                                                       |  |     
|COST OF SALES                                          |  |      | 2,108,743 |   |      |   | 2,190,173 |  
|                                                       |  |      |           |   |      |   |           |  
|                                                       |  |     
|Gross Profit                                           |  |      | 832,192   |   |      |   | 910,831   |  
|                                                       |  |      |           |   |      |   |           |  
|                                                       |  |     
|OPERATING EXPENSES                                     |  |      |           |   |      |   |           |  
|Selling expenses                                       |  |      | 327,413   |   |      |   | 368,742   |  
|General and administrative expenses                    |  |      | 323,221   |   |      |   | 319,038   |  
|                                                       |  |      |           |   |      |   |           |  
|                                                       |  |     
|Total operating expenses                               |  |      | 650,634   |   |      |   | 687,780   |  
|                                                       |  |      |           |   |      |   |           |  
|                                                       |  |     
|Income from operations                                 |  |      | 181,558   |   |      |   | 223,051   |  
|                                                       |  |      |           |   |      |   |           |  
|                                                       |  |     
|OTHER INCOME (EXPENSE)                                 |  |      |           |   |      |   |           |  
|Miscellaneous income                                   |  |      | 385       |   |      |   | 14,003    |  
|Interest (expense) (Note 3, 4 & 5)                     |  |      | (4,127    | ) |      |   | (6,346    | )
|                                                       |  |      |           |   |      |   |           |  
|                                                       |  |     
|Total other income (expense)                           |  |      | (3,742    | ) |      |   | 7,657     |  
|                                                       |  |      |           |   |      |   |           |  
|                                                       |  |     
|Income before income taxes                             |  |      | 177,816   |   |      |   | 230,708   |  
|                                                       |  |     
|PROVISION FOR INCOME TAXES (NOTE 7)                    |  |      | 70,867    |   |      |   | 38,459    |  
|                                                       |  |      |           |   |      |   |           |  
|                                                       |  |     
|NET INCOME                                             |  |      | 106,949   |   |      |   | 192,249   |  
|                                                       |  |     
|Preferred dividends                                    |  |      | (128,072  | ) |      |   | (128,072  | )
|                                                       |  |      |           |   |      |   |           |  
|                                                       |  |     
|Net income (loss) applicable to common stockholders    |  | $    | (21,123   | ) |      | $ | 64,177    |  
|                                                       |  |      |           |   |      |   |           |  
|                                                       |  |     
|NET INCOME (LOSS) PER SHARE OF COMMON STOCK  (NOTE 8) |  |      |           |   |      |   |           |  
|                                                       |  |     
|BASIC                                                  |  | $    | (.02      | ) |      | $ | .07       |  
|                                                       |  |      |           |   |      |   |           |  
|                                                       |  |     
|DILUTED                                                |  | $    |          |   |      | $ | .03       |  
|                                                       |  |      |           |   |      |   |           |  
|                                                       |  |     
|WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING    |  |      | 969,834   |   |      |   | 969,834   |  
|                                                       |  |      |           |   |      |   |           |  

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



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CHASE GENERAL CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

Years Ended June 30, 2010 and 2009



|                        |  |                                 |         |                           |   |             |  |                |           |                    |   |         |       |   |         |  |   |           |  |   |            |   |  |   |        
|----------------------- |  | ------------------------------- | ------- | ------------------------- | - | ----------- |  | -------------- | --------- | ------------------ | - | ------- | ----- | - | ------- |  | - | --------- |  | - | ---------- | - |  | - | -------
|                        |  | Prior CumulativePreferred Stock |         | CumulativePreferred
Stock |   | CommonStock |  | Paid-inCapital |           | AccumulatedDeficit |   |         | Total
|                        |  | Series A                        |         | Series B                  |   | Series A    |  | Series B       |           |                    |   |         |       |   |         |  |  
|                        |  |                                 |         |                           |   |             |  |               
|BALANCE , JUNE 30, 2008 |  | $                               | 500,000 |                           | $ | 500,000     |  | $              | 1,170,660 |                    | $ | 190,780 |       | $ | 969,834 |  | $ | 3,134,722 |  | $ | (5,972,255 | ) |  | $ | 493,741
|                        |  |                                 |         |                           |   |             |  |               
|Net income              |  |                                 |        |                           |   |            |  |                |          |                    |   |        |       |   |        |  |   |          |  |   | 192,249    |   |  |   | 192,249
|                        |  |                                 |         |                           |   |             |  |                |           |                    |   |         |       |   |         |  |   |           |  |   |            |   |  |   |        
|                        |  |                                 |         |                           |   |             |  |               
|BALANCE , JUNE 30, 2009 |  |                                 | 500,000 |                           |   | 500,000     |  |                | 1,170,660 |                    |   | 190,780 |       |   | 969,834 |  |   | 3,134,722 |  |   | (5,780,006 | ) |  |   | 685,990
|                        |  |                                 |         |                           |   |             |  |               
|Net income              |  |                                 |        |                           |   |            |  |                |          |                    |   |        |       |   |        |  |   |          |  |   | 106,949    |   |  |   | 106,949
|                        |  |                                 |         |                           |   |             |  |                |           |                    |   |         |       |   |         |  |   |           |  |   |            |   |  |   |        
|                        |  |                                 |         |                           |   |             |  |               
|BALANCE , JUNE 30, 2010 |  | $                               | 500,000 |                           | $ | 500,000     |  | $              | 1,170,660 |                    | $ | 190,780 |       | $ | 969,834 |  | $ | 3,134,722 |  | $ | (5,673,057 | ) |  | $ | 792,939
|                        |  |                                 |         |                           |   |             |  |                |           |                    |   |         |       |   |         |  |   |           |  |   |            |   |  |   |        

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



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CHASE GENERAL CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended June 30, 2010 and 2009



|                                                                 |  |      |            |   |      |   |            |  
|---------------------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | -
|                                                                 |  | 2010 |            |   | 2009 |  
|CASH FLOWS FROM OPERATING ACTIVITIES                             |  |      |            |   |      |   |            |  
|                                                                 |  |     
|Collections from customers                                       |  | $    | 3,006,936  |   |      | $ | 3,081,032  |  
|Other income                                                     |  |      | 925        |   |      |   | 690        |  
|Cost of sales, selling, general and administrative expenses paid |  |      | (2,799,647 | ) |      |   | (2,806,623 | )
|Interest paid                                                    |  |      | (3,871     | ) |      |   | (7,409     | )
|Income taxes paid                                                |  |      | (385       | ) |      |   |           |  
|                                                                 |  |      |            |   |      |   |            |  
|                                                                 |  |     
|Net cash provided by operating activities                        |  |      | 203,958    |   |      |   | 267,690    |  
|                                                                 |  |      |            |   |      |   |            |  
|                                                                 |  |     
|CASH FLOWS FROM INVESTING ACTIVITIES                             |  |      |            |   |      |   |            |  
|                                                                 |  |     
|Proceeds from sale of property and equipment                     |  |      |           |   |      |   | 24,000     |  
|Purchases of property and equipment                              |  |      | (260,770   | ) |      |   | (76,918    | )
|                                                                 |  |      |            |   |      |   |            |  
|                                                                 |  |     
|Net cash (used in) investing activities                          |  |      | (260,770   | ) |      |   | (52,918    | )
|                                                                 |  |      |            |   |      |   |            |  
|                                                                 |  |     
|CASH FLOWS FROM FINANCING ACTIVITIES                             |  |      |            |   |      |   |            |  
|                                                                 |  |     
|Proceeds from line-of-credit                                     |  |      | 210,000    |   |      |   | 145,000    |  
|Principal payments on line-of-credit                             |  |      | (210,000   | ) |      |   | (195,000   | )
|Proceeds from equipment notes payable                            |  |      | 163,909    |   |      |   |           |  
|Principal payments on stockholder notes payable                  |  |      |           |   |      |   | (140,000   | )
|Principal payments on vehicle note payable                       |  |      | (29,360    | ) |      |   | (20,829    | )
|                                                                 |  |      |            |   |      |   |            |  
|                                                                 |  |     
|Net cash provided by (used in) financing activities              |  |      | 134,549    |   |      |   | (210,829   | )
|                                                                 |  |      |            |   |      |   |            |  
|                                                                 |  |     
|NET INCREASE IN CASH AND CASH EQUIVALENTS                        |  |      | 77,737     |   |      |   | 3,943      |  
|                                                                 |  |     
|CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                     |  |      | 28,771     |   |      |   | 24,828     |  
|                                                                 |  |      |            |   |      |   |            |  
|                                                                 |  |     
|CASH AND CASH EQUIVALENTS, END OF YEAR                           |  | $    | 106,508    |   |      | $ | 28,771     |  
|                                                                 |  |      |            |   |      |   |            |  

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



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CHASE GENERAL CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended June 30, 2010 and 2009



|                                                                                  |  |      |         |   |      |   |         |  
|--------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | -
|                                                                                  |  | 2010 |         |   | 2009 |  
|RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES         |  |      |         |   |      |   |         |  
|                                                                                  |  |     
|Net income                                                                        |  | $    | 106,949 |   |      | $ | 192,249 |  
|                                                                                  |  |     
|Adjustments to reconcile net income to net cash provided by operating activities: |  |      |         |   |      |   |         |  
|Depreciation and amortization                                                     |  |      | 75,344  |   |      |   | 71,030  |  
|Provision for bad debts                                                           |  |      | (845    | ) |      |   | 1,995   |  
|Deferred income amortization                                                      |  |      | (1,299  | ) |      |   | (1,299  | )
|Deferred income taxes                                                             |  |      | 70,665  |   |      |   | 38,274  |  
|(Gain) loss on sale of equipment                                                  |  |      | 1,839   |   |      |   | (12,014 | )
|Effects of changes in operating assets and liabilities:                           |  |      |         |   |      |   |         |  
|Trade receivables                                                                 |  |      | 66,001  |   |      |   | (19,972 | )
|Inventories                                                                       |  |      | (36,426 | ) |      |   | (63,642 | )
|Prepaid expenses                                                                  |  |      | 11,899  |   |      |   | (10,712 | )
|Accounts payable                                                                  |  |      | (89,836 | ) |      |   | 73,691  |  
|Accrued expenses                                                                  |  |      | (150    | ) |      |   | (2,095  | )
|Income tax payable                                                                |  |      | (183    | ) |      |   | 185     |  
|                                                                                  |  |      |         |   |      |   |         |  
|                                                                                  |  |     
|NET CASH PROVIDED BY OPERATING ACTIVITIES                                         |  | $    | 203,958 |   |      | $ | 267,690 |  
|                                                                                  |  |      |         |   |      |   |         |  

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



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CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

Chase General
Corporation (the Company) was incorporated on November 6, 1944 in the State of Missouri for the purpose of manufacturing confectionery products. The Company grants credit terms to substantially all customers, consisting of repackers, grocery
accounts, and national syndicate accounts, who are primarily located in the Midwest region of the United States.

Significant accounting
policies are as follows:

PRINCIPLES OF CONSOLIDATION

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

SEGMENT REPORTING OF THE BUSINESS

The subsidiary, Dye Candy 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. The products of both divisions 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, segment reporting for the two divisions is not maintained by Management and,
accordingly, has not been disclosed in these consolidated financial statements.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 consolidated financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

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

REVENUE RECOGNITION

The Company
recognizes revenues as product is shipped to the customers. Net sales are comprised of the total sales billed during the period, including shipping and handling charges to customers, less the estimated returns, customer allowances and customer
discounts.



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CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)



SHIPPING AND HANDLING COSTS

Shipping and handling costs for freight expense on goods shipped is included in cost of sales. Freight expense on goods shipped for the years ended
June 30, 2010 and 2009 was $135,109 and $156,489, respectively.

RECEIVABLES

Accounts receivable are uncollateralized customer obligations which generally require payment within thirty days from the invoice date. Accounts
receivable are stated at the invoice amount as no interest is charged to the customer for any past due amounts. Payments of accounts receivable are applied to the specific invoices identified on the customers remittance advice or, if
unspecified, to the earliest unpaid invoices.

The carrying amount of accounts receivable is reduced by a valuation allowance that reflects
managements best estimate of amounts that will not be collected. The allowance for doubtful accounts is based on managements assessment of the collectability of specific customer accounts and the aging of the accounts receivable. If
there is a deterioration of a major customers credit worthiness or actual defaults are higher than the historical experience, managements estimates of the recoverability of amounts due the Company could be adversely affected. All
accounts or portions thereof deemed to be uncollectible, or to require an excessive collection cost, are written off to the allowance for doubtful accounts.

INVENTORIES

Inventories are carried at
the lower of cost or market value with cost being determined on the first-in, first-out basis of accounting. Finished goods and goods in process include a provision for manufacturing overhead.

PROPERTY AND EQUIPMENT

Property and
equipment is recorded at cost. The Companys property and equipment are being depreciated on straight-line and accelerated methods over the following estimated useful lives:



|                        |  |                    
|----------------------- |  | -------------------
|Buildings               |  | 39 years           
|Machinery and equipment |  | 5 - 7 years        
|Trucks and autos        |  | 5 years            
|Office Equipment        |  | 5 - 7 years        
|Leasehold improvements  |  | Lesser of estimated
|                        |  | useful life or the 
|                        |  | lease term         



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CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)



IMPAIRMENT OF LONG-LIVED ASSETS

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to
be recognized is measured by the amount by which the carrying amount of the assets exceed the fair value of the assets.

INCOME TAXES

Deferred income taxes are provided using the liability method for temporary differences between financial statement and income tax reporting.
Temporary differences are differences between the amounts of assets and liabilities reported for financial statement purposes and their tax bases. Deferred tax assets are recognized for temporary differences that will be deductible in future
years tax returns and for operating loss and tax credit carryforwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some or all of the deferred tax assets will not
be realized. Deferred tax liabilities are recognized for temporary differences that will be taxable in future years tax returns. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the dates of
enactment.

The Companys policy is to evaluate uncertain tax positions under the guidance as prescribed by ASC 740, Income Taxes.
As of June 30, 2010, the Company has not identified any uncertain tax positions requiring recognition in the consolidated financial statements.

EARNINGS PER SHARE

Basic Earnings Per
Common Share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted Earnings Per Common Share shall be computed by including contingently issuable shares
with the weighted average shares outstanding during the period. When inclusion of the contingently issuable shares would have an antidilutive effect upon earnings per share, no diluted earnings per share shall be presented.

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



|                                                                             |  |         |  |        
|---------------------------------------------------------------------------- |  | ------- |  | -------
|                                                                             |  | 2010    |  | 2009   
|Shares issuable upon conversion of Series A Prior Cumulative Preferred Stock |  | 400,000 |  | 400,000
|Shares issuable upon conversion of Series B Prior Cumulative Preferred Stock |  | 375,000 |  | 375,000
|Shares issuable upon conversion of Series A Cumulative Preferred Stock       |  | 222,133 |  | 222,133
|Shares issuable upon conversion of Series B Cumulative Preferred Stock       |  | 36,201  |  | 36,201 



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CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)



ADVERTISING EXPENSE

Advertising is expensed when incurred. Advertising expense was $640 and $750 for the years ended June 30, 2010 and 2009, respectively.

IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS

Pursuant to SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles  a
replacement of FASB Statement No. 162, the FASB Accounting Standards Codification (ASC) (FASB ASC 105) became the sole source of authoritative U.S. GAAP for interim and annual periods ending after September 15, 2009,
except for rules and interpretive releases of the SEC, which are sources of authoritative GAAP for SEC registrants. The Company adopted this standard during the first quarter of 2009. Reference to specific accounting standards in the footnotes to
our consolidated financial statements have been changed to refer to the appropriate section of the ASC.

During the third quarter, Chase
adopted FASB accounting Standards Update (ASU) No. 2010-09, Amendments to Certain Recognition and Disclosure Requirements, which amends ASC 855, Subsequent Events. This ASU removes the requirement for an SEC filer to disclose a date through
which subsequent events have been evaluated. This change removes potential conflicts with SEC requirements. Because this update affects the disclosure and not the accounting treatment for subsequent events, the adoption of this provision did not
have a material impact on the Companys consolidated financial statements.

During the third quarter, Chase adopted FASB ASU
No. 2010-06 Fair Value Measurements and Disclosures (Topic 820). This ASU requires new disclosures for transfers in and out of Levels 1 and 2, and Activity in Level 3 fair value measurements. The update also clarifies the level disaggregation
and disclosures about inputs and valuation techniques. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009. The requirement related to Level 3
fair value measurements is effective for the Company for interim and annual reporting periods beginning after January 29, 2011. The adoption of the effective portions of this new standard did not have a material impact to the Companys
consolidated financial statements and the Company does not expect a material impact to its consolidated financial statements related to the Level 3 fair value disclosures.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)



In June 2009, the FASB issued new guidance on the consolidation of variable interest entities
(VIE) in response to concerns about the application of certain key provisions of pre-existing guidance, including those regarding the transparency of the involvement with a VIE. Specifically, this new guidance requires a qualitative
approach to identifying a controlling financial interest in a VIE and requires ongoing assessment of whether an entity is a VIE and whether an interest in a VIE makes the holder the primary beneficiary of the VIE. In addition, this new guidance
requires additional disclosures about the involvement with a VIE and any significant changes in risk exposure due to that involvement. This new guidance is effective for fiscal years beginning after November 15, 2009. We plan to adopt the new
guidance in fiscal year 2011 and the Company is currently evaluating the impact of adopting the standard on its consolidated financial statements.

NOTE 2 - FORGIVABLE LOAN AND DEFERRED INCOME

During 2004, the Company received a $25,000 economic development incentive from Buchanan County, which is a five year forgivable loan at a rate of $5,000
per year. The Nodaway Valley Bank established an Irrevocable Standby Letter of Credit in the amount of $25,000 as collateral for this loan, with a maturity date of January 3, 2010. The Company met the criteria of occupying a 20,000 square foot
building and creating a minimum of two new full-time equivalent jobs during the first year of operation in the new facility. In addition, the Company maintained 19 existing jobs during the five year term. Notice was received February 6, 2009
from the Buchanan County Commission, that the Company had fulfilled its minimum loan requirements so that the loan was forgiven in full and has no further obligations. Since the Company was no longer legally required to return the monies, the
liability was reclassified as deferred revenue and amortized into income over the life of the lease term of the new facility. At June 30, 2009, a total of $25,000 was reclassified to deferred revenue. Deferred revenue is recognized on a
straight line basis over the lease term of 20 years. During the years ended June 30, 2010 and 2009, deferred revenue of $1,299 was amortized into income for each period.

NOTE 3 - NOTES PAYABLE

The
Companys long-term debt consists of:



|            |  |                                                                                                       |  |      |        |      |   |       
|----------- |  | ----------------------------------------------------------------------------------------------------- |  | ---- | ------ | ---- | - | ------
|Payee       |  | Terms                                                                                                 |  | 2010 |        | 2009
|Ford Credit |  | $1,001 monthly payments including interest of 0%; final payment due March 2011, secured by a vehicle. |  | $    | 9,003  |      | $ | 21,010
|            |  |                                                                                                       | 
|Ford Credit |  | $573 monthly payments including interest of 6.99%; final payment due July 2012, secured by a vehicle. |  |      | 13,636 |      |   | 19,039



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 3 - NOTES PAYABLE(CONTINUED)



|                    |  |                                                                                                              |  |      |         |      |   |       
|------------------- |  | ------------------------------------------------------------------------------------------------------------ |  | ---- | ------- | ---- | - | ------
|Payee               |  | Terms                                                                                                        |  | 2010 |         | 2009
|Honda               |  | $508 monthly payments including interest of 1.9%; final payment due December 15, 2011, secured by a vehicle. |  |      | 9,007   |      |   | 14,871
|                    |  |                                                                                                              | 
|Nissan              |  | $557 monthly payments including interest of 3.9%; final payment due April 2012, secured by a vehicle.        |  |      | 11,740  |      |   | 17,826
|                    |  |                                                                                                              | 
|Nodaway Valley Bank |  | $3,192, including interest of 6.25%; final payment due June 2015, secured by equipment.                      |  |      | 163,909 |      |   |      
|                    |  |                                                                                                              |  |      |         |      |   |       
|                    |  |                                                                                                              | 
|                    |  | Total                                                                                                        |  |      | 207,295 |      |   | 72,746
|                    |  | Less current portion                                                                                         |  |      | 56,820  |      |   | 30,142
|                    |  |                                                                                                              |  |      |         |      |   |       
|                    |  | Long-term portion                                                                                            |  | $    | 150,475 |      | $ | 42,604
|                    |  |                                                                                                              |  |      |         |      |   |       

Future minimum payments are:



|      |  |   |        
|----- |  | - | -------
|2011  |  | $ | 56,820 
|2012  |  |   | 45,768 
|2013  |  |   | 33,287 
|2014  |  |   | 34,822 
|2015  |  |   | 36,598 
|      |  |   |        
|Total |  | $ | 207,295
|      |  |   |        

NOTE 4 - NOTE PAYABLE - BANK

Effective January 1, 2009, the Company had a $250,000 line-of-credit agreement which expired on January 1, 2010. This line-of-credit agreement
was renewed on that date to extend until January 3, 2011, with a variable interest rate at prime (5.0% at June 30, 2010 and 2009, respectively). The line-of-credit was collateralized by certain equipment. At June 30, 2010 and 2009,
there was no outstanding balance on the line-of-credit.

NOTE 5 - NOTE PAYABLE - STOCKHOLDER

The Company borrowed $140,000 from a stockholder/officer during the fiscal year ending June 30, 2009, which were repaid by December 31, 2008.
This unsecured loan had no maturity date and carried a 4.5% annual interest rate. Interest expense on stockholder/officer note was $2,534 for the year ending June 30, 2009.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 6 - CAPITAL STOCK

Capital stock authorized, issued, and outstanding as of June 30, 2010 is as follows:



|                                                            |  |            |  |                      
|----------------------------------------------------------- |  | ---------- |  | ---------------------
|                                                            |  | Shares    
|                                                            |  | Authorized |  | Issued andOutstanding
|Prior Cumulative Preferred Stock, $5 par value:             |  |            |  |                      
|6% Convertible                                              |  | 240,000    |  |                      
|Series A                                                    |  |            |  | 100,000              
|Series B                                                    |  |            |  | 100,000              
|                                                            |  |           
|Cumulative Preferred Stock, $20 par value:                  |  |            |  |                      
|5% Convertible                                              |  | 150,000    |  |                      
|Series A                                                    |  |            |  | 58,533               
|Series B                                                    |  |            |  | 9,539                
|                                                            | 
|                                                            |  | Shares    
|                                                            |  | Authorized |  | Issued andOutstanding
|Common Stock, $1 par value:                                 |  |            |  |                      
|Reserved for conversion of Preferred Stock1,030,166 shares |  | 2,000,000  |  | 969,834              

Cumulative Preferred Stock
dividends in arrears at June 30, 2010 and 2009 totaled $7,180,374 and $7,052,302, respectively. Total dividends in arrears, on a per share basis, consist of the following at June 30, 2010 and 2009:



|               |  |      |       |      |   |      
|-------------- |  | ---- | ----- | ---- | - | -----
|               |  | 2010 |       | 2009
|6% Convertible |  |      |       |      |   |      
|Series A       |  | $    | 15.45 |      | $ | 15.15
|Series B       |  |      | 15.00 |      |   | 14.70
|               |  |     
|5% Convertible |  |      |       |      |   |      
|Series A       |  |      | 60.75 |      |   | 59.75
|Series B       |  |      | 60.75 |      |   | 59.75

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



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 6 - CAPITAL STOCK (CONTINUED)



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 7 - INCOME TAX

The recognition of income tax expense related to uncertain tax provisions is determined under the provisions of FASB ASC-740-10. The Company had no
unrecognized tax benefits as of the date of adoption, the income tax provisions taken for open years are appropriately stated and supported for all open years.

As of June 30, 2008, the Company had a net operating loss carryforward of approximately $170,706, of which the Companys June 30, 2009
profits absorbed $166,194 and 2010 profits absorbed $4,512 of this available net operating loss.

The sources of deferred tax assets and
liability at June 30, 2010 and 2009, and the tax effect of each are as follows:



|                           |  |      |          |   |      |   |         |  
|-------------------------- |  | ---- | -------- | - | ---- | - | ------- | -
|                           |  | 2010 |          |   | 2009 |  
|Deferred tax assets:       |  |      |          |   |      |   |         |  
|Inventories                |  | $    | 174      |   |      | $ | 120     |  
|Trade receivables          |  |      | 5,063    |   |      |   | 3,357   |  
|Contribution carryover     |  |      | 607      |   |      |   | 1,149   |  
|Deferred income            |  |      | 6,513    |   |      |   | 4,363   |  
|                           |  |      |          |   |      |   |         |  
|                           |  |     
|Total deferred tax assets  |  |      | 12,357   |   |      |   | 8,989   |  
|                           |  |     
|Deferred tax liability:    |  |      |          |   |      |   |         |  
|Property and equipment     |  |      | (100,382 | ) |      |   | (26,349 | )
|                           |  |      |          |   |      |   |         |  
|                           |  |     
|NET DEFERRED TAX LIABILITY |  | $    | (88,025  | ) |      | $ | (17,360 | )
|                           |  |      |          |   |      |   |         |  

The net deferred tax assets (liability) are presented in the accompanying June 30, 2010 and 2009 balance sheets as
follows:



|                                  |  |      |         |   |      |   |         |  
|--------------------------------- |  | ---- | ------- | - | ---- | - | ------- | -
|                                  |  | 2010 |         |   | 2009 |  
|Current deferred tax asset        |  | $    | 5,844   |   |      | $ | 4,626   |  
|Noncurrent deferred tax liability |  |      | (93,869 | ) |      |   | (21,986 | )
|                                  |  |      |         |   |      |   |         |  
|                                  |  |     
|NET DEFERRED TAX LIABILITY        |  | $    | (88,025 | ) |      | $ | (17,360 | )
|                                  |  |      |         |   |      |   |         |  



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 7 - INCOME TAX(CONTINUED)



The provision (credit) for income taxes, for the years ended June 30, 2010 and 2009, consists of
the following:



|                               |  |      |        |      |   |       
|------------------------------ |  | ---- | ------ | ---- | - | ------
|                               |  | 2010 |        | 2009
|Current tax expense            |  | $    | 202    |      | $ | 185   
|Deferred tax expense (benefit) |  |      | 70,665 |      |   | 38,274
|                               |  |      |        |      |   |       
|                               |  |     
|                               |  | $    | 70,867 |      | $ | 38,459
|                               |  |      |        |      |   |       

The income tax provision differs from the amount of income tax
determined by applying the statutory federal income tax rate to pretax income for the years ended June 30, 2010 and 2009 due to the following:



|                                                               |  |      |        |      |   |         |  
|-------------------------------------------------------------- |  | ---- | ------ | ---- | - | ------- | -
|                                                               |  | 2010 |        | 2009 |  
|Computed expected tax (benefit)                              |  | $    | 62,236 |      | $ | 80,748  |  
|Increase (decrease) in income taxes (benefits) resulting from: |  |      |        |      |   |         |  
|State income taxes, net of federal benefit                     |  |      | 5,960  |      |   | 11,896  |  
|Other                                                          |  |      | 2,671  |      |   | (54,185 | )
|                                                               |  |      |        |      |   |         |  
|                                                               |  |     
|                                                               |  | $    | 70,867 |      | $ | 38,459  |  
|                                                               |  |      |        |      |   |         |  

The Company has unused contributions of $1,771 to carryforward that will expire for tax years ranging from 2011 through
2015.

NOTE 8 - INCOME (LOSS) PER SHARE

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



|                                                   |  |      |           |   |      |   |          
|-------------------------------------------------- |  | ---- | --------- | - | ---- | - | ---------
|                                                   |  | 2010 |           |   | 2009
|Net income                                         |  | $    | 106,949   |   |      | $ | 192,249  
|                                                   |  |      |           |   |      |   |          
|                                                   |  |     
|Preferred dividend requirements:                   |  |      |           |   |      |   |          
|6% Prior Cumulative Preferred, $5 par value        |  |      | 60,000    |   |      |   | 60,000   
|5% Convertible Cumulative Preferred, $20 par value |  |      | 68,072    |   |      |   | 68,072   
|                                                   |  |      |           |   |      |   |          
|                                                   |  |     
|Total dividend requirements                        |  |      | 128,072   |   |      |   | 128,072  
|                                                   |  |      |           |   |      |   |          
|                                                   |  |     
|Net income (loss) - common stockholders            |  | $    | (21,123   | ) |      | $ | 64,177   
|                                                   |  |      |           |   |      |   |          
|                                                   |  |     
|Weighted average of shares - basic                 |  |      | 969,834   |   |      |   | 969,834  
|                                                   |  |      |           |   |      |   |          
|                                                   |  |     
|Dilutive effect of contingently issuable shares    |  |      | 1,033,334 |   |      |   | 1,033,334
|                                                   |  |      |           |   |      |   |          
|                                                   |  |     
|Weighted Average Shares  Diluted                  |  |      | 2,003,168 |   |      |   | 2,003,168
|                                                   |  |      |           |   |      |   |          
|                                                   |  |     
|Basic earnings (loss) per share                    |  | $    | (.02      | ) |      | $ | .07      
|                                                   |  |      |           |   |      |   |          
|                                                   |  |     
|Diluted earnings per share                         |  | $    |          |   |      | $ | .03      
|                                                   |  |      |           |   |      |   |          



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CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 9 - SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION



|                                              |  |      |       |      |   |       
|--------------------------------------------- |  | ---- | ----- | ---- | - | ------
|                                              |  | 2010 |       | 2009
|Cash paid for:                                |  |      |       |      |   |       
|Interest                                      |  | $    | 3,871 |      | $ | 7,409 
|Income taxes                                  |  |      | 385   |      |   |      
|Non-cash transaction:                         |  |      |       |      |   |       
|Reclass of forgivable loan to deferred income |  |      |      |      |   | 10,000
|Financing of new vehicle                      |  |      |      |      |   | 60,556

NOTE 10 - COMMITMENTS

Dye Candy Company leases its office and manufacturing facility, located at 1307 South
59th, St. Joseph, Missouri, from an entity owned by the
Vice-President and Director of the Company and his spouse. The period of the lease is from February 1, 2005 through March 31, 2025, with an option to extend for an additional term of five years, and currently requires payments of $6,500
per month. At the end of the first five years, the base rent shall be increased an amount not greater than 30%, at the sole discretion of lessor and for each additional term of five years. Rental expense was $78,000 for each year ended June 30,
2010 and 2009. The amounts are included in cost of sales.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 10 - COMMITMENTS(CONTINUED)



Future minimum lease payments under this lease are as follows:

Year ending June 30:



|           |  |   |          
|---------- |  | - | ---------
|2011       |  | $ | 78,000   
|2012       |  |   | 78,000   
|2013       |  |   | 78,000   
|2014       |  |   | 78,000   
|2015       |  |   | 78,000   
|Thereafter |  |   | 760,500  
|           |  |   |          
|           |  | $ | 1,150,500
|           |  |   |          

As of June 30, 2010, the Company had raw materials purchase
commitments with three vendors totaling $207,000.

NOTE 11 - 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 June 30, 2010, 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.

NOTE 12 - CONCENTRATION OF
CREDIT RISK

For the years ending June 30, 2010 and 2009, two customers accounted for 39% and 44%, respectively, of the gross sales.
For the year ending June 30, 2010 and 2009, four customers accounted for 77% and 76%, respectively, of accounts receivable.



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##### Table of Contents

|Item 9 | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|------ | ------------------------------------------------------------------------------------

Not applicable



|Item 9A(T) | CONTROLS AND PROCEDURES
|---------- | -----------------------



| | (a) | Evaluation of Disclosure Controls and Procedures
| | --- | ------------------------------------------------

The Companys principal executive officer, who is also the chief financial and accounting officer, has evaluated the effectiveness of
the Companys disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act), as of the end of the period covered by this report.
Based on such evaluation, such officer has concluded that the Companys disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed in periodic filings under the Exchange Act is
accumulated and communicated to Management, including those officers, and to members of the Board of Directors, to allow timely decisions regarding required disclosure.



| | (b) | Managements Report on Internal Control over Financial Reporting
| | --- | ----------------------------------------------------------------

The Companys management is responsible for establishing and maintaining effective internal control over financial reporting as
defined in Rule 13a-15(f) under the Exchange Act. Management has assessed the Companys internal control over financial reporting in relation to criteria described in Internal Control-Integrated Framework, issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment using those criteria, management concluded that, as of June 30, 2010, the Companys internal control over financial reporting was effective.

This Annual Report does not include an attestation report of the Companys independent registered public accounting firm
regarding internal control over financial reporting. Managements report was not subject to attestation by the Companys independent registered public accounting firm pursuant to the temporary rules of the Securities and Exchange
Commission that permit the Company to provide only managements report in this Annual Report.



| | (c) | Changes in Internal Controls
| | --- | ----------------------------

There were no significant changes in the Companys internal controls over financial reporting or in other factors that in
managements estimates are reasonably likely to materially affect the Companys internal controls over financial reporting subsequent to the date of the evaluation.



|Item 9B | OTHER INFORMATION
|------- | -----------------

None



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##### Table of Contents

PART III



|Item 10 | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|------- | ------------------------------------------------------



| | (a) | Directors
| | --- | ---------



|                |  |     |  |                                |  |         
|--------------- |  | --- |  | ------------------------------ |  | --------
|Name            |  | Age |  | Periods of Service as Director |  | Terms   
|                |  |     | 
|Barry M. Yantis |  | 65  |  | 1980 to present                |  | One year
|Brett A. Yantis |  | 42  |  | January 21, 1999 to present    |  | One year
|Brian A. Yantis |  | 62  |  | July 16, 1986 to present       |  | One year

Executive
Officers



|                |  |     |  |                              |  |                              |  |                        
|--------------- |  | --- |  | ---------------------------- |  | ---------------------------- |  | -----------------------
|Name            |  | Age |  | Position                     |  | Years ofService asan Officer |  | Term                   
|                |  |     |  |                             
|Barry M. Yantis |  | 65  |  | President, CEO and Treasurer |  | 31                           |  | Until successor elected
|Brett A. Yantis |  | 42  |  | Vice-President               |  | 8                            |  | Until successor elected
|Brian A. Yantis |  | 62  |  | Secretary                    |  | 18                           |  | Until successor elected



| | (b) | Certain Significant Employees
| | --- | -----------------------------

There are no significant employees other than above.



| | (c) | Family Relationships
| | --- | --------------------

Barry M. Yantis and Brian A. Yantis are brothers. Brett A. Yantis is the son of Barry M. Yantis.

Business Experience



| | (1) | Barry M. Yantis, president and treasurer has been an officer of the Company for thirty-one years, twelve years as vice-president and nineteen years as president. He has
been on the board of directors for thirty-one years and has been associated with the candy business for thirty-six years.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Brett A. Yantis was elected to the position of director during the year ending June 30, 1999. Brett was elected vice-president in
January 2003. Brett has been associated with the Company for seventeen years.

Brian A. Yantis, secretary has been an officer
of the Company since May 1992. He has been associated with the insurance business for thirty-five years and has been a vice-president of Aon Risk Services in Chicago, Illinois during the past twenty-one years.



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



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##### Table of Contents

| | (d) | Involvement in Certain Legal Proceedings
| | --- | ----------------------------------------

Not applicable



| | (e) | Audit Committee Financial Expert
| | --- | --------------------------------

Registrant is not required to have an audit committee since the stock is not actively traded. The Board of Directors are not considered
audit committee financial experts, but do effectively operate as the audit committee.



| | (f) | Code of Ethics
| | --- | --------------

The
Company has adopted a Code of Business Conduct and Ethics that applies to all executive officers, directors and employees of the Company. The Code of Business Conduct and Ethics is attached as Exhibit 14 to this Annual Report on Form 10-K.



|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) | 
| | --- | 

Summary Compensation
Table



|                                                                                                                                                                                                                                                  |  |                |  |                     |         |        |   |                         |  |                          |       |                 |   |             |   |                       |   |  |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- |  | ------------------- | ------- | ------ | - | ----------------------- |  | ------------------------ | ----- | --------------- | - | ----------- | - | --------------------- | - |  | -
|                                                                                                                                                                                                                                                  |  |                |  |                     |         |        |   |                         |  | Long Term Compensation  
|                                                                                                                                                                                                                                                  |  |                |  | Annual Compensation |         | Awards |   | Payouts                 |  |                         
|Name and
Principal Position                                                                                                                                                                                                                       |  | FiscalYear End |  | Salary              |         | Bonus  |   | OtherAnnualCompensation |  | RestrictedStockAward (s) |       | Option/SARs (#) |   | LTIPPayouts |   | All otherCompensation
|                                                                                                                                                                                                                                                  |  |                |  |                     |         |        |   |                        
|Barry M. Yantis                                                                                                                                                                                                                                   |  | 1) 06-30-10    |  | $                   | 132,000 |        | $ |                        |  | $                        | 3,700 |                 |  |             |  |                       |  |  | 
|                                                                                                                                                                                                                                                  |  |                |  |                     |         |        |   |                        
|Barry M. Yantis                                                                                                                                                                                                                                   |  | 1) 06-30-09    |  | $                   | 127,902 |        | $ |                        |  | $                        | 2,635 |                 |  |             |  |                       |  |  | 
|                                                                                                                                                                                                                                                  |  |                |  |                     |         |        |   |                        
|Barry M. Yantis                                                                                                                                                                                                                                   |  | 1) 06-30-08    |  | $                   | 121,900 |        | $ |                        |  | $                        | 2,175 |                 |  |             |  |                       |  |  | 
|                                                                                                                                                                                                                                                 
|1)      CEO, President and Treasurer
2)      No other compensation than that which is listed in compensation
table. 3)      No other officers have compensation over $100,000
for their services besides those listed in this compensation table.



| | (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 plan awards table
| | --- | -------------------------------------

Not applicable



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##### Table of Contents

|Item 11 | EXECUTIVE COMPENSATION(CONTINUED)
|------- | ---------------------------------



| | (f) | 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 2010 and 2009, $-0- and $137, respectively, of travel expenses were reimbursed to board member Brian A. Yantis.



| | (g) | Employment contracts and termination of employment and change in control arrangements
| | --- | -------------------------------------------------------------------------------------

No employment contracts exist with any executive officers. In addition, there are no contracts currently in place regarding termination of
employment or change in control arrangements.



| | (h) | Report on repricing of option/SARs
| | --- | ----------------------------------

Not applicable



| | (i) | 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, Brian A. Yantis, Barry M. Yantis, and Brett A. Yantis (all
current officers of the Company) annually approve the compensation of Barry M. Yantis, CEO, President and Treasurer.



| | (j) | 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.



39



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##### Table of Contents

|Item 12 | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|------- | --------------------------------------------------------------



|               |  |                                                                                                                                                                                                                                          |  |                                                                     |  |         |           |  |      |     
|-------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------- |  | ------- | --------- |  | ---- | ----
|Title of Class |  | Name and Address                                                                                                                                                                                                                         |  | AmountsandNature ofBeneficialOwnership                              |  |         | % ofClass | 
|(a)            |  | Security ownership of certain beneficial owners                                                                                                                                                                                          |  |                                                                     |  |         |           |  |      |     
|               |  |                                                                                                                                                                                                                                          |  |                                                                    
|               |  | Common; par value $1 per share                                                                                                                                                                                                           |  | Barry Yantis, CEO & Director
5605 Osage Drive St. Joseph, Mo.
64503 |  | 194,385 | (1)       |  | 16.9 | %(2)
|               |  |                                                                                                                                                                                                                                          |  |                                                                    
|               |  |                                                                                                                                                                                                                                          |  | Brian Yantis, Officer &                                             |  |         |           |  |      |     
|               |  |                                                                                                                                                                                                                                          |  | Director                                                            |  | 97,192  | (1)       |  | 8.4  | %(2)
|               |  |                                                                                                                                                                                                                                          |  | 1210 E. Clarendon                                                   |  |         |           |  |      |     
|               |  |                                                                                                                                                                                                                                          |  | Arlington Heights, IL.                                              |  |         |           |  |      |     
|               |  |                                                                                                                                                                                                                                          |  | 60004                                                               |  |         |           |  |      |     
|               |  |                                                                                                                                                                                                                                          |  |                                                                    
|(b)            |  | Security ownership of management                                                                                                                                                                                                         |  |                                                                     |  |         |           |  |      |     
|               |  |                                                                                                                                                                                                                                          |  |                                                                    
|               |  | Common; par value $1 per share                                                                                                                                                                                                           |  | Two directors and CEO as a
group                                    |  | 110,856 |           |  | 11.4 | %   
|               |  |                                                                                                                                                                                                                                          |  |                                                                    
|               |  | Prior Cumulative Preferred, $5
par value: Series A, 6% convertible                                                                                                                                                                       |  | Two directors and CEO as a
group                                    |  | 21,533  |           |  | 21.5 | %   
|               |  |                                                                                                                                                                                                                                          |  |                                                                    
|               |  | Prior Cumulative Preferred $5
par value: Series B, 6% convertible                                                                                                                                                                        |  | Two directors and CEO as a
group                                    |  | 21,533  |           |  | 21.5 | %   
|               |  |                                                                                                                                                                                                                                          |  |                                                                    
|               |  | Cumulative Preferred, $20 par value: Series A, $5 convertible                                                                                                                                                                            |  | Two directors and CEO as a
group                                    |  | 3,017   |           |  | 5.2  | %   
|               |  |                                                                                                                                                                                                                                          |  |                                                                    
|               |  | Cumulative Preferred, $20 par value: Series B, $5 convertible                                                                                                                                                                            |  | Two directors and CEO as a
group                                    |  | 630     |           |  | 6.6  | %   
|               | 
|               |  | (1)    Includes 120,477 and 60,244 shares, respectively, which could be received within 30
days upon conversion of preferred stock. (2)    Reflects the percentage assuming
the preferred shares above were converted into common stock. | 
|               | 
|(c)            |  | No known change of control is anticipated.                                                                                                                                                                                               | 



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##### Table of Contents

|Item 13 | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
|------- | ------------------------------------------------------------------------



| | (a) | Transactions with management and others
| | --- | ---------------------------------------

The registrants subsidiary, Dye Candy Company entered into an operating lease agreement during the 2005 fiscal year to provide
office and manufacturing facilities with a limited liability company that is owned 100% by Vice-President and Director, Brett A. Yantis and his spouse. The annual rent is $78,000.



| | (b) | Certain business relationships
| | --- | ------------------------------

Not applicable



| | (c) | Indebtedness of management
| | --- | --------------------------

Not applicable



| | (d) | Transactions with promoters
| | --- | ---------------------------

Not applicable



|Item 14 | PRINCIPAL ACCOUNTANT FEES AND SERVICES
|------- | --------------------------------------

The following table shows the aggregate fees billed to the Company for professional services for the years ended June 30, 2010 and
2009:



|                          |  |      |        |      |   |       
|------------------------- |  | ---- | ------ | ---- | - | ------
|                          |  | 2010 |        | 2009
|Audit fees:               |  |      |        |      |   |       
|Mayer Hoffman McCann P.C. |  | $    | 56,745 |      | $ | 49,332
|Audit related fees:       |  |      |        |      |   |       
|McGladrey & Pullen, LLP   |  |      |       |      |   | 2,380 
|Tax fees                  |  |      |       |      |   |      
|All other fees            |  |      |       |      |   |      



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##### Table of Contents

PART IV



|Item 15 | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|------- | ------------------------------------------

The following documents are filed as part of this report.



|   |  |                                                                                                                                |  |                                                                                                                                                                                                                                |  |     
|-- |  | ------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----
|   |  |                                                                                                                                |  |                                                                                                                                                                                                                                |  | Page
|1. |  | Financial Statements:                                                                                                          |  |                                                                                                                                                                                                                               
|   |  |                                                                                                                               
|   |  | Index to Financial Statements                                                                                                  |  | 17                                                                                                                                                                                                                            
|   |  |                                                                                                                               
|   |  | Consolidated Balance Sheets                                                                                                    |  | 19 - 20                                                                                                                                                                                                                       
|   |  |                                                                                                                               
|   |  | Consolidated Statements of Operations                                                                                          |  | 21                                                                                                                                                                                                                            
|   |  |                                                                                                                               
|   |  | Consolidated Statements of Stockholders Equity                                                                                |  | 22                                                                                                                                                                                                                            
|   |  |                                                                                                                               
|   |  | Consolidated Statements of Cash Flows                                                                                          |  | 23 - 24                                                                                                                                                                                                                       
|   |  |                                                                                                                               
|   |  | Notes to Consolidated Financial Statements                                                                                     |  | 25 - 35                                                                                                                                                                                                                       
|   |  |                                                                                                                               
|2. |  | Financial Statements Schedules:                                                                                                |  |                                                                                                                                                                                                                               
|   |  |                                                                                                                               
|   |  | None                                                                                                                           |  |                                                                                                                                                                                                                               
|   |  |                                                                                                                               
|3. |  | Exhibits:                                                                                                                      |  |                                                                                                                                                                                                                               
|   |  |                                                                                                                               
|   |  | The exhibits listed below are filed with or incorporated by reference in this report.                                          |  |                                                                                                                                                                                                                               
|   |  |                                                                                                                               
|   |  | The following have been previously filed and are incorporated by reference to prior years Forms 10-K filed by the Registrant: |  |                                                                                                                                                                                                                               
|   |  |                                                                                                                                | 
|   |  | 3.1                                                                                                                            |  | Articles of Incorporation of Chase General Corporation                                                                                                                                                                         |  |     
|   |  |                                                                                                                                | 
|   |  | 3.2                                                                                                                            |  | Bylaws                                                                                                                                                                                                                         |  |     
|   |  |                                                                                                                               
|   |  | The following are Exhibits attached or explanations included in Notes to Financial Statements in Part II of this report:     |  |                                                                                                                                                                                                                               
|   |  |                                                                                                                                | 
|   |  | 4.                                                                                                                             |  | Instruments defining the rights of security holders including indenturesRefer to Note 6.                                                                                                                                      |  |     
|   |  |                                                                                                                                | 
|   |  | 11.                                                                                                                            |  | Computation of per share earningsRefer to Note 8.                                                                                                                                                                             |  |     
|   |  |                                                                                                                                | 
|   |  | 14.                                                                                                                            |  | Code of Ethics                                                                                                                                                                                                                 |  |     
|   |  |                                                                                                                                | 
|   |  | 21.                                                                                                                            |  | Subsidiaries of registrantRefer to Note 1 of Notes to Financial Statements.                                                                                                                                                   |  |     
|   |  |                                                                                                                                | 
|   |  | 31.1                                                                                                                           |  | Certification of Chief Executive Officer and Financial Officer pursuant to Rule 13a-14(a)/15d  14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 |  |     
|   |  |                                                                                                                                | 
|   |  | 32.1                                                                                                                           |  | Certification of Chairman of the Board, Chief Executive Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                            |  |     



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##### Table of Contents

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: September 23, 2010 |  | By:                       |  | /s/ Barry M. Yantis                            
|                         |  |                           |  | Barry M. Yantis                                
|                         |  |                           |  | Chairman of the Board, Chief Executive Officer,
|                         |  |                           |  | President and Treasurer                        

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.



|                    |  |  |  |                                                                                                            |  |  |  |                   
|------------------- |  |  |  | ---------------------------------------------------------------------------------------------------------- |  |  |  | ------------------
|Signatures          |  |  |  | Title                                                                                                      |  |  |  | Date              
|                    |  |  |  |                                                                                                           
|/s/ Barry M. Yantis |  |  |  |                                                                                                            |  |  |  | September 23, 2010
|Barry M. Yantis     |  |  |  | President, Treasurer (Principal Executive Officer and Chief Financial and Accounting Officer) and Director |  |  |  |                   
|                    |  |  |  |                                                                                                           
|/s/ Brett Yantis    |  |  |  |                                                                                                            |  |  |  | September 23, 2010
|Brett Yantis        |  |  |  | Vice-President and Director                                                                                |  |  |  |                   
|                    |  |  |  |                                                                                                           
|/s/ Brian A. Yantis |  |  |  |                                                                                                            |  |  |  | September 23, 2010
|Brian A. Yantis     |  |  |  | Secretary and Director                                                                                     |  |  |  |                   



43