<PAGE>

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

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


For the fiscal year ended June 30, 2002

Commission File Number 2-5916

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

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

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

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

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

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

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
           -
State the aggregate market value of the voting stock held by non-affiliates of
registrant: Voting stock not actively traded. Therefore, market value of stock
unknown as of 60 days prior to the date of this filing.

Indicate the number of shares outstanding of each of the registrants' classes of
common stock as of the latest practicable date: 969,834 (one class with $1 par
                                                -------
value) as of September 5, 2002.

Location in this filing where exhibit index is located: 30
                                                        --
Total number of pages included in this filing: 38
                                               --

                                        1

<PAGE>

                                     PART I

ITEM 1 BUSINESS

       (a) General development of business

           (1) Narrative history of business

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

           (2) Not applicable.

       (b) Financial information about industry segments

           The subsidiary, Dye Candy Company, operates two divisions, Chase
           Candy Company and Poe Candy Company. Operations in Chase Candy
           Company involve production and sale of a candy bar marketed under the
           trade name "Cherry Mash". Operations in Poe Candy Company involve
           production and sale of coconut, peanut, chocolate, and fudge
           confectioneries. Division products are sold to the same type of
           customers in the same geographical areas. In addition, both divisions
           share a common labor force and utilize the same basic equipment and
           raw materials. Due to the similarities in the products manufactured,
           segment reporting for the two divisions is not maintained by
           Management and, accordingly, is not available for inclusion in this
           filing.

       (c) Narrative description of businesses

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

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

                                   (Continued)

                                        2

<PAGE>

ITEM 1 BUSINESS (CONTINUED)

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

                 (1) 60 count pack
                 (2) 12 boxes of 24 bars per box
                 (3) 200 count shipper box
                 (4) 96 count shipper box

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

                 (1) 24 - 12 oz. bags
                 (2) 6 jars - 60 bars per jar
                 (3) 23 # wrapped bars
                 (4) 22 # unwrapped bars

                 The bars are sold primarily to wholesale candy and tobacco
                 jobbing houses, grocery accounts, and vendors. "Cherry Mash"
                 bars are marketed in the Midwest region of the United States.
                 For the years ended June 30, 2002, 2001, and 2000, this
                 division accounted for 62%, 57%, and 61%, respectively, of the
                 consolidated revenue of Dye Candy Company.

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

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

                 The Poe line is sold primarily on a Midwest regional basis to
                 national syndicate accounts, repackers, and grocery accounts.
                 For the years ended June 30, 2002, 2001, and 2000, this
                 division accounted for 38%, 43%, and 39%, respectively, of the
                 consolidated revenue of Dye Candy Company. The Company
                 discontinued the coconut cubes during the year ended June 30,
                 2000.

            (ii) Not applicable.

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

                                   (Continued)

                                        3

<PAGE>

ITEM 1 BUSINESS (CONTINUED)

            (iv) The largest single revenue producing product, the "Cherry Mash"
                 bar, is protected by a trademark registered with the United
                 States Government Patents Office. Management considers this
                 trademark very important to the Company. The trademark was
                 renewed during the fiscal year ended June 30, 1985. This
                 trademark expires in the year 2003. Management and its legal
                 representatives do not expect any impediment to renewing this
                 trademark prior to its expiration.

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

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

           (vii) For the years ending June 30, 2002, 2001, and 2000, Associated
                 Wholesale Grocers, accounted for 20.43%, 25.64%, and 20.01% of
                 gross sales, respectively. For the years ending June 30, 2002,
                 2001, and 2000, Wal-Mart and its affiliates accounted for
                 16.12%, 28.54%, and 20.08% of gross sales, respectively. The
                 loss of Associated Wholesale Grocers would not have an adverse
                 effect on the Company as the customer purchases and distributes
                 to retail outlets and these outlets would continue to demand
                 products offered by Dye Candy Company. However, due to the
                 affiliation certain outlets have with Wal-Mart, a loss of this
                 customer would reduce gross sales. The Company continues to
                 seek additional markets for its products.

          (viii) 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.

            (ix) Not applicable.

                                   (Continued)

                                        4

<PAGE>

ITEM 1 BUSINESS (CONTINUED)

            (x)     The confectionery market for the type of product produced by
                    the divisions of Dye Candy Company is very competitive and
                    quality minded. The confectionery (candy) industry in which
                    the divisions operate is highly competitive with many small
                    companies and, within certain specialized areas, a few
                    competitors dominate. In the United States, the dominant
                    competitors in the coconut candy industry are Bradley Candy
                    Company, Crown Candy Company, Vermico Candy Company, and the
                    Poe Division of Dye Candy Company with approximately 70% of
                    the market share among them. In the United States, Sophie
                    Mae and Old Dominion have approximately 80% of the market
                    share of the peanut candy business in which the Poe Division
                    operates. Dye Candy Company sells approximately 90% of its
                    products in the Midwest region with seasonal orders being
                    shipped to the Southern and Eastern regions of the United
                    States. Except for the coconut candy industry, Dye Candy
                    Company is not a dominant competitor in any of the candy
                    industries in which it competes. Dye Candy Company's market
                    share in the coconut industry approximates 15% to 20%
                    annually. This 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' experience
                    associated with its name.

            (xi)    Not applicable.

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

            (xiii)  The Company employs approximately 20 full time personnel
                    year round. This expands to approximately 50 full time
                    personnel during the two busy production seasons in spring
                    and fall.

       (d) Foreign and domestic operations and export sales

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

                                        5

<PAGE>

ITEM 2 PROPERTIES

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

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

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

ITEM 3 LEGAL PROCEEDINGS

       The Company is not, and has not been, a party in any material pending
       legal proceedings, other than ordinary litigation incidental to its
       business, during the fiscal year ended June 30, 2002, nor are any such
       proceedings contemplated.

ITEM 4 RESULTS OF VOTES OF SECURITY HOLDERS

       No matters were submitted to a vote of security holders of the registrant
       during the fourth quarter of the fiscal year ended June 30, 2002.

                                        6

<PAGE>

                                     PART II

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

       (a)  Market information

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

       (b)  Approximate number of security holders

            As of September 5, 2001, the latest practicable date, the
            approximate number of record holders of common stock was 1,439,
            including individual participants in security listings.

       (c)  Dividends

            (1)   Dividend history and restrictions

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

            (2)   Dividend policy

                  There is no set policy on the payment of dividends due to the
                  financial condition of the Company and other factors. It is
                  not anticipated that cash dividends will be paid in the
                  foreseeable future.

ITEM 6 SELECTED FINANCIAL DATA

       (a)  Last five years

<TABLE>
<CAPTION>
                                                  6-30-2002      06-30-2001      06-30-2000     06-30-1999   06-30-1998
                                                  ---------      ----------      ----------     ----------   ----------
<S>                                              <C>            <C>             <C>            <C>           <C>
       (i)   Net sales or operating revenue      $ 1,843,484    $ 1,981,030     $ 2,129,785    $ 2,134,920   $2,113,777

       (ii)  Income (loss) from continuing
             operations                          $     1,390    $   (27,191)    $    42,284    $    49,262   $  (33,502)

       (iii) Income (loss) from continuing
               operations per common share *     $      (.13)   $      (.16)    $      (.09)   $      (.09)  $     (.17)

       (iv)  Total assets                        $   711,416    $   714,901     $   800,691    $   798,961   $  770,998

       (v)   Long-term debt                      $    51,010    $    77,672     $   127,672    $   162,672   $  185,305

       (vi)  Cash dividend declared
               per common share                  $        --    $        --     $        --    $        --   $       --
</TABLE>

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


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

                                        7

<PAGE>

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

       (a & b) Liquidity and capital resources

            Positive cash flows from operating activities were generated for
            fiscal years ended June 30, 2002, 2001, and 2000 in the amounts of
            $126,472, $74,261, and $28,797, respectively.

            At various times during the years, and in anticipation of heavier
            cash demands due to seasonal production, plant improvements, and/or
            major promotional programs, it is the Company's practice to invest
            in short term U.S. Treasury obligations or financial institution
            certificates of deposit. At June 30, 2002, 2001, and 2000 the
            Company had $100,000, $50,000, and $100,000, respectively, invested
            in short term certificates of deposit to meet the 2002, 2001, and
            2000 fall production season.

            The Company continually monitors raw material pricing, and when a
            price increase/decrease is anticipated adjustments to inventory
            levels are made accordingly. Raw materials decreased approximately
            $57,000 from June 30, 2001 to June 30, 2002. Raw materials increased
            approximately $27,000 from June 30, 2000 to June 30, 2001. Raw
            materials at June 30, 2000 were comparable to prior year. Purchase
            commitments at June 30, 2002 were approximately $101,000 higher than
            at June 30, 2001. This increase was due to approximately $49,000 in
            peanut contracts over prior year, approximately $16,000 increase in
            coconut commitments, and approximately $36,000 additional purchase
            commitments of chocolate over prior year. The Company watches
            markets for these commodities and purchases are made accordingly.

            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 were
            comparable from June 30, 2001 to June 30, 2002. Packaging inventory
            decreased approximately $59,000 from June 30, 2000 to June 30, 2001.
            The decrease was due to the higher than normal purchase in 2000.
            These inventory items were purchased during the year ending June 30,
            2000 to replenish inventory used in the current and prior years
            production. These items were purchased in quantities large enough to
            fulfill the Company's packaging needs for several seasons.

            Finished goods inventory did not significantly change from June 30,
            2001 to June 30, 2002. The slight increase was due to timing of
            customer purchases of the Cherry Mash products.

            Finished goods inventory did not significantly change from June 30,
            2000 to June 30, 2001. The slight decrease was due to timing of
            customer purchases of the Cherry Mash products. Goods in process
            remained comparable to prior years.

                                   (Continued)

                                        8

<PAGE>

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

          The Company continues to write off equipment that is no longer useful
          to the operations of the Company. These write offs have been
          immaterial over the past three years. The Company also continues to
          replace old equipment on a yearly basis in order to streamline
          operations. However, due to cash flow needs in other areas, the
          Company has not been able to update the equipment at any significant
          level. Expenditures of $13,574 were made during the year ended June
          30, 2000 to upgrade existing production equipment, in addition to
          $40,053 of expenditures made to update transportation and office
          equipment. Expenditures of $53,626 were made to upgrade and replace
          transportation and office equipment during the year ended June 30,
          2001. Expenditures of $3,637 were made during the year ended June 30,
          2002 to upgrade existing production equipment. In addition, $24,759
          was expended to update transportation and office equipment. Depending
          on results of operations and cash flows, the Company is hoping to
          replace their antiquated brittle cookers in the next several years
          with no set target date.

          For the past nine years, the Company has not been indebted except for
          the series B notes. Of the outstanding amount at June 30, 2001,
          $77,672 is classified long-term and $-0- is classified as current. On
          December 20, 1995, the Company received approval to extend the notes
          to December 20, 2002 at the current 6% rate of interest, with the
          agreement that this will be the final note extension. Of the
          outstanding amount at June 30, 2002, $51,010 is classified as current
          and $-0- is classified as long-term. Realizing that the minimum yearly
          principal payment required by the note indenture will not satisfy the
          notes on December 20, 2002, the Company has accelerated the principal
          payments on the notes during the past four fiscal years. It is
          anticipated that acceleration of principal payments will continue as
          cash flow has been adequate for operations and equipment replacement
          and the balance is expected to be paid by December 20, 2002.

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

          During the year ended June 30, 2001, net sales decreased 7% from June
          30, 2000 through June 30, 2001. The decrease was due to promotions
          with customers in the prior year which were discontinued.
          Additionally, in the prior year receivables from certain customers
          were written off. The Company did not do business with these customers
          in the current year. Cost of sales decreased by 5% from June 30, 2000
          through June 30, 2001 due to the decrease in net sales.

          Operating expenses increased by 5.8% from June 30, 2000 through June
          30, 2001. This increase was due to increased selling expenses. Selling
          expenses increased from the prior year by $15,252 due to commissions
          and bonuses given to employees during the year. While most general and
          administration expenses remained constant, insurance expense increased
          by $9,265 as rates for general and liability insurance continues to go
          up. The Company was aggressive in their collection efforts and write
          offs decreased by $17,865 from June 30, 2000 through June 30, 2001.
          The aging of accounts receivable is reviewed on a regular basis and
          accounts which become overdue are pursued for collection.

                                   (Continued)

                                        9

<PAGE>

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

          During the year ended June 30, 2002, net sales decreased 7% from June
          30, 2001 through June 30, 2002. The decrease was due to fewer sales to
          customers as these customers' number of operating facilities continued
          to decrease. In addition, sales decreased due to the uncertainty of
          the economy and terrorism activities on 9/11. Cost of sales decreased
          12% from June 30, 2001 through June 30, 2002 due to the decrease in
          net sales, as well as, more efficient production, and a reduction in
          payroll due to fewer employees needed for the operation of the company
          facilities.

          Operating expenses increased by 5% from June 30, 2001 through June 30,
          2002. This increase was due to increased selling expenses. Selling
          expenses increased from the prior year by $13,889 due to promotions,
          bill backs, etc. as the Company continued to attempt to expand its
          business. While most general and administration expenses remained
          constant, insurance expense increased by $5,860 as rates for general
          and liability insurance continues to go up. The Company continued to
          be aggressive in their collection efforts. The aging of accounts
          receivable is reviewed on a regular basis and accounts which become
          overdue are pursued for collection.

          Under the leadership of the CEO and his sales staff, the Company has
          stabilized its customer base. Certainly some customers were lost
          during 2002, but the Company is working to replace those customers.
          The Company continues to look for new markets but only when the
          addition of a new market is profitable.

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

          There has been no material impact from inflation and changing prices
          on net sales and revenues or on income from continuing operations for
          the last three fiscal years. The Company does not feel that any
          accounting changes, as proposed by the Financial Accounting Standards
          Board, with effective dates after the date of this report, will have a
          material effect on future financial statements of the Company.

          The Company's only computer application, SBT software, involves the
          payroll processing accounting function.

                                   (Continued)

                                       10

<PAGE>

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

           Not applicable. Refer to Note 7, "Notes to Financial Statements" for
           fair value of financial instruments as of June 30, 2002.

ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

       Financial statements meeting the requirements of Regulation S-X are
       contained on pages 13 through 25 of the filing.

       (a) Selected quarterly financial data

           Exempt from requirements per second major condition for smaller
           companies.

       (b) Information about oil and gas producing activities

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

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

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

                                       11

<PAGE>

                          INDEPENDENT AUDITOR'S REPORT

Board of Directors
Chase General Corporation
St. Joseph, Missouri

We have audited the accompanying consolidated balance sheets of Chase General
Corporation and subsidiary as of June 30, 2002 and 2001 and the related
consolidated statements of operations, stockholders' equity, and cash flows for
each of the years in the three-year period ended June 30, 2002. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Chase
General Corporation and subsidiary as of June 30, 2002 and 2001, and the results
of their operations and their cash flows for each of the years in the three-year
period ended June 30, 2002, in conformity with accounting principles generally
accepted in the United States of America.

                                                       /s/ Clifton Gunderson LLP


Clifton Gunderson LLP
St. Joseph, Missouri
August 22, 2002

                                       12

<PAGE>

                    CHASE GENERAL CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                             June 30, 2002 and 2001

                                     ASSETS

<TABLE>
<CAPTION>
                                                                  2002         2001
                                                               ----------   ----------
<S>                                                            <C>          <C>
CURRENT ASSETS
   Cash and cash equivalents                                   $  188,528   $  117,114
   Receivables:
       Trade, less allowance for doubtful
       accounts of $9,834 in 2002 and $10,669 in 2001             121,918      100,494
       Income tax receivables                                       7,053        7,053
   Inventories:
       Finished goods                                              79,382       73,138
       Goods in process                                             2,557        1,943
       Raw materials                                               23,377       80,592
       Packaging materials                                         60,635       64,536
   Prepaid expense                                                 22,110       34,606
   Prepaid income taxes                                             1,316       11,220
                                                               ----------   ----------

          Total current assets                                    506,876      490,696
                                                               ----------   ----------

PROPERTY AND EQUIPMENT
   Land                                                            35,000       35,000
   Buildings                                                       85,738       85,738
   Machinery and equipment                                        680,995      677,358
   Trucks and autos                                               172,709      148,527
   Office equipment                                                50,237       49,660
   Leasehold improvements                                         121,356      121,356
                                                               ----------   ----------
       Total, at cost                                           1,146,035    1,117,639
   Less accumulated depreciation                                  941,495      893,434
                                                               ----------   ----------

          Total property and equipment                            204,540      224,205
                                                               ----------   ----------


TOTAL ASSETS                                                   $  711,416   $  714,901
                                                               ==========   ==========
</TABLE>

                                       13

<PAGE>

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                     2002           2001
                                                                 -----------    -----------
<S>                                                              <C>            <C>
CURRENT LIABILITIES
   Accounts payable                                              $    66,600    $    46,002
   Notes payable, Series B, current maturities                        51,010             --
   Accrued expense:
      Interest                                                         3,862          6,161
      Other                                                           32,628         29,140
                                                                 -----------    -----------
          Total current liabilities                                  154,100         81,303

LONG-TERM LIABILITIES
     Notes payable, Series B, less current maturities above               --         77,672
                                                                 -----------    -----------

          Total liabilities                                          154,100        158,975
                                                                 -----------    -----------

STOCKHOLDERS' EQUITY
   Capital stock issued and outstanding:
      Prior cumulative preferred stock, $5 par value:
          Series A (liquidation preference $1,305,000 and
             $1,275,000 respectively)                                500,000        500,000
          Series B (liquidation preference $1,260,000 and
             $1,230,000 respectively)                                500,000        500,000
      Cumulative preferred stock, $20 par value:
          Series A (liquidation preference $3,087,616 and
             $3,029,083 respectively)                              1,170,660      1,170,660
          Series B (liquidation preference $503,182 and
             $493,643 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                                            (5,908,680)    (5,910,070)
                                                                 -----------    -----------

          Total stockholders' equity                                 557,316        555,926
                                                                 -----------    -----------


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                       $   711,416    $   714,901
                                                                 ===========    ===========
</TABLE>

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

                                       14

<PAGE>

                    CHASE GENERAL CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    Years Ended June 30, 2002, 2001, and 2000

<TABLE>
<CAPTION>
                                                                      2002                2001               2000
                                                                ----------------    ---------------     ---------------
<S>                                                             <C>                 <C>                 <C>
NET SALES                                                       $      1,843,484    $     1,981,030     $     2,129,785

COST OF SALES                                                          1,389,708          1,587,058           1,665,882
                                                                ----------------    ---------------     ---------------

     Gross Profit                                                        453,776            393,972             463,903
                                                                ----------------    ---------------     ---------------

OPERATING EXPENSES
     Selling expenses                                                    246,639            232,750             218,211
     General and administrative expenses                                 204,833            197,650             188,660
                                                                ----------------    ---------------     ---------------

         Total operating expenses                                        451,472            430,400             406,871
                                                                ----------------    ---------------     ---------------

         Income (loss) from operations                                     2,304            (36,428)             57,032
                                                                ----------------    ---------------     ---------------

OTHER INCOME (EXPENSE)
     Interest income                                                       2,405              6,922               6,323
     Miscellaneous income                                                  1,726              1,690                 347
     Interest expense                                                     (3,861)            (6,160)             (8,842)
     Other expense                                                            --                 --                (173)
                                                                ----------------    ---------------     ---------------

         Total other income (expense)                                        270              2,452              (2,345)
                                                                ----------------    ---------------     ---------------

              Income (loss) before income taxes                            2,574            (33,976)             54,687

PROVISION (CREDIT) FOR INCOME TAXES                                        1,184             (6,785)             12,403
                                                                ----------------    ---------------     ---------------

NET INCOME (LOSS)                                                          1,390            (27,191)             42,284

     Preferred dividends                                                (128,072)          (128,072)           (128,072)
                                                                ----------------    ---------------     ---------------

     Net loss applicable to common stockholders                 $       (126,682)   $      (155,263)    $       (85,788)
                                                                ================    ===============     ===============

(LOSS) PER SHARE OF COMMON STOCK                                $           (.13)   $          (.16)    $          (.09)
                                                                ================    ===============     ===============
</TABLE>

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

                                       15

<PAGE>

                    CHASE GENERAL CORPORATION AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                    Years Ended June 30, 2002, 2001, and 2000

<TABLE>
<CAPTION>
                                                 Prior Cumulative                      Cumulative                   Common
                                                  Preferred Stock                    Preferred Stock                 Stock
                                          -------------------------------     -----------------------------      ------------
                                            Series A          Series B          Series A         Series B
                                          ------------      -------------     ------------     ------------
<S>                                       <C>               <C>               <C>              <C>               <C>
BALANCE (DEFICIT), JULY 1, 1999           $    500,000      $    500,000      $  1,170,660     $    190,780      $    969,834

     Net income                                     --                 --               --               --                --
                                          ------------      -------------     ------------     ------------      ------------

BALANCE (DEFICIT), JUNE 30, 2000               500,000            500,000        1,170,660          190,780           969,834

     Net loss                                       --                 --               --               --                --
                                          ------------      -------------     ------------     ------------      ------------
BALANCE (DEFICIT), JUNE 30, 2001               500,000            500,000        1,170,660          190,780           969,834

     Net income                                     --                 --               --               --                --
                                          ------------      -------------     ------------     ------------      ------------

BALANCE (DEFICIT), JUNE 30, 2002          $    500,000      $     500,000     $  1,170,660     $    190,780      $    969,834
                                          ============      =============     ============     ============      ============

<CAPTION>

                                             Paid-in         Accumulated
                                             Capital           Deficit           Total
                                          ------------      -------------     ------------
<S>                                       <C>               <C>               <C>
BALANCE (DEFICIT), JULY 1, 1999           $  3,134,722      $  (5,925,163)    $    540,833

     Net income                                     --             42,284           42,284
                                          ------------      -------------     ------------

BALANCE (DEFICIT), JUNE 30, 2000             3,134,722         (5,882,879)         583,117

     Net loss                                       --            (27,191)         (27,191)
                                          ------------      -------------     ------------
BALANCE (DEFICIT), JUNE 30, 2001             3,134,722         (5,910,070)         555,926

     Net income                                     --              1,390            1,390
                                          ------------      -------------     ------------

BALANCE (DEFICIT), JUNE 30, 2002          $  3,134,722      $  (5,908,680)    $    557,316
                                          ============      =============     ============
</TABLE>

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

                                       16

<PAGE>

                    CHASE GENERAL CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                    Years Ended June 30, 2002, 2001, and 2000

<TABLE>
<CAPTION>
                                                                           2002              2001             2000
                                                                       -------------    -------------     -------------
<S>                                                                    <C>              <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES

     Collections from customers                                        $   1,874,065    $   2,010,278     $   2,119,123
     Interest received                                                         2,405            6,922             6,323
     Other income                                                              1,726            1,689             1,182
     Cost of sales, selling, general and
         administrative expenses paid                                     (1,745,563)      (1,924,698)       (2,075,152)
     Interest paid                                                            (6,161)          (8,710)          (10,571)
     Income tax paid                                                              --          (11,220)          (12,108)
                                                                       -------------    -------------     -------------

         Net cash provided by operating activities                           126,472           74,261            28,797
                                                                       -------------    -------------     -------------

CASH FLOWS FROM INVESTING ACTIVITIES

     Purchases of property and equipment                                     (28,396)         (53,926)          (53,627)
                                                                       -------------    -------------     -------------

         Net cash used in investing activities                               (28,396)         (53,926)          (53,627)
                                                                       -------------    -------------     -------------

CASH FLOWS FROM FINANCING ACTIVITIES

     Principal payments on notes payable, Series B                           (26,662)         (50,000)          (35,000)
                                                                       -------------    --------------    -------------

         Net cash used in financing activities                               (26,662)         (50,000)          (35,000)
                                                                       -------------    -------------     -------------

NET INCREASE (DECREASE) IN CASH
     AND CASH EQUIVALENTS                                                     71,414          (29,665)          (59,830)

CASH AND CASH EQUIVALENTS,
   BEGINNING OF YEAR                                                         117,114          146,779           206,609
                                                                       -------------    -------------     -------------

CASH AND CASH EQUIVALENTS, END OF YEAR                                 $     188,528    $     117,114     $     146,779
                                                                       =============    =============     =============
</TABLE>

                                       17

<PAGE>

<TABLE>
<CAPTION>
                                                                           2002              2001             2000
                                                                       -------------    -------------     -------------
<S>                                                                    <C>              <C>               <C>
RECONCILIATION OF NET INCOME TO NET
   CASH PROVIDED BY OPERATING ACTIVITIES

     Net income (loss)                                                 $       1,390    $     (27,191)    $      42,284

     Adjustments to reconcile net income (loss) to net
         cash provided by operating activities:
         Depreciation                                                         48,061           48,069            52,211
         Loss on disposal of equipment                                            --               --               835
         Provision for doubtful accounts                                       1,333            2,225            20,603
         Effects of changes in operating assets and liabilities:
              Trade receivable                                               (22,757)          26,299           (10,662)
              Other receivable                                                    --            3,239            (3,239)
              Income tax receivable                                               --           (7,054)               --
              Inventories                                                     54,258           46,980           (67,032)
              Prepaid expense                                                 12,496              354               509
              Prepaid income taxes                                             9,904          (10,063)           (1,158)
              Accounts payable                                                20,598           (8,716)            6,335
              Income taxes payable                                                --               --            (8,855)
              Accrued liabilities                                              1,189              119            (3,034)
                                                                       -------------    -------------     -------------

NET CASH PROVIDED BY
   OPERATING ACTIVITIES                                                $     126,472    $      74,261     $      28,797
                                                                       =============    =============     =============
</TABLE>

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

                                       18

<PAGE>

                    CHASE GENERAL CORPORATION AND SUBSIDIARY
                   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

PRINCIPLES OF CONSOLIDATION

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

SEGMENT REPORTING OF THE BUSINESS

The subsidiary, Dye Candy Company, operates two divisions, Chase Candy Company
and Poe Candy Company. Operations in Chase Candy Company involve production and
sale of a candy bar marketed under the trade name "Cherry Mash". Operations in
Poe Candy Company involve production and sale of coconut, peanut, chocolate, and
fudge confectioneries. Division products are sold to the same type of customers
in the same geographical areas. In addition, both divisions share a common labor
force and utilize the same basic equipment and raw materials. Due to the
similarities in the products manufactured, 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 IN PREPARING FINANCIAL STATEMENTS

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

CASH AND CASH EQUIVALENTS

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

                                       19

<PAGE>

                    CHASE GENERAL CORPORATION AND SUBSIDIARY
                   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

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


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, freight paid on these shipped goods, and
customer discounts.

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

The Company has no significant timing differences that would give rise to
deferred tax items.

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

                                       20

<PAGE>

                    CHASE GENERAL CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - NOTES PAYABLE, SERIES B

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

Pursuant to a supplemental indenture, dated April 1, 1968 and executed in
compliance with a request by Yantis & Co. in furtherance of the winding-up of
its affairs, the original notes aggregating $680,000 were reissued in two series
designated as A and B, respectively. The Series A notes aggregating $50,000 had
priority and were retired during the year ended June 30, 1984. The Series B
notes totaling $630,000 are held by the former shareholders of Yantis & Co.
During the years ended June 30, 2002 and 2001, $26,662 and $50,000 principal was
paid on the Series B notes, respectively.

As of June 30, 2002 and 2001, the outstanding Series B notes total $51,010 and
$77,672, respectively. Of these amounts $22,032 and $29,376, respectively are
owed to officers and directors of the Company.

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

The indenture provides for a sinking fund deposit to be made by the Company each
year of not less than one-fourth of the Company's fiscal year "surplus net
earnings," which exceeds the amount of interest required to be paid on the
outstanding notes. If at any time the sinking fund deposits aggregate $10,000 or
more, the same will be applied to prepayment of the notes outstanding. At June
30, 2002 and 2001, there was no sinking fund requirement. The "surplus net
earnings" is the amount by which the consolidated net income, after adding back
the current year's interest on the outstanding notes, exceeds a $25,000 working
capital reserve.

See Note 2 for computation of "surplus net earnings" and sinking fund
requirements for years ended June 30, 2002, 2001, and 2000.

                                       21

<PAGE>

                    CHASE GENERAL CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - NOTES PAYABLE, SERIES B (CONTINUED)

Principal payments are made by the trustee under terms of the indenture and may
be prepaid at the option of the Company. During the year ended June 30, 1991,
the notes were extended to December 20, 1994. Effective December 20, 1995, the
notes were extended to December 20, 2002 at the same 6% interest rate and with
the agreement that this will be the final note extension.

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

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

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

<TABLE>
<CAPTION>
                                                   2002        2001         2000
                                                 --------    --------     --------
<S>                                              <C>         <C>          <C>
NET INCOME (LOSS)
  Chase General Corporation                      $(12,612)   $(11,446)    $(10,798)
  Dye Candy Company                                14,002     (15,745)      53,082
                                                 --------    --------     --------

     Consolidated net income (loss)                 1,390     (27,191)      42,284

NON-ALLOWANCE EXPENSE DEDUCTION
  Interest on indebtedness                          3,861       6,160        8,842
                                                 --------    --------     --------

          Net income (loss) basis for
           "surplus net earnings"                   5,251     (21,031)      51,126

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

            "Surplus net earnings (loss)"         (19,749)    (46,031)      26,126

INTEREST PAYMENT REQUIRED                           3,861       6,160        8,842
                                                 --------    --------     --------

EXCESS "SURPLUS NET EARNINGS (LOSS)"
 OVER INTEREST PAYMENT REQUIRED                  $(23,610)   $(52,191)    $ 17,284
                                                 ========    ========     ========

SINKING FUND REQUIREMENT                         $     --    $     --     $  4,321
                                                 ========    ========     ========
</TABLE>

                                       22

<PAGE>

                    CHASE GENERAL CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - COMMITMENTS

Dye Candy Company leases its manufacturing facilities located at 3600 Leonard
Road, St. Joseph, Missouri. The period of the lease is from April 1, 1995
through March 31, 2005, and requires payments of $2,955 per month. Rental
expense was $35,460 for the years ended June 30, 2002, 2001, and 2000. The
amounts are included in cost of sales.

Future minimum lease payments under this lease are as follows:

Year ending June 30, 2003                                        $    35,460
Year ending June 30, 2004                                             35,460
Year ending June 30, 2005                                             29,550
                                                                 -----------

     Total                                                       $   100,470
                                                                 ===========

As of June 30, 2002, the Company had raw materials purchase commitments with
three vendors totaling $100,527.


NOTE 4 - CAPITAL STOCK

Capital stock authorized, issued and outstanding as of June 30, 2002 and 2001 is
as follows:

<TABLE>
<CAPTION>
                                                                        Shares
                                                             ----------------------------
                                                                             Issued and
                                                              Authorized     Outstanding
                                                             ------------   -------------
<S>                                                          <C>            <C>
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

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

                                       23

<PAGE>

                    CHASE GENERAL CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4 - CAPITAL STOCK (CONTINUED)

Cumulative Preferred Stock dividends in arrears at June 30, 2002 and 2001,
totaled $6,155,798 and $6,027,726, respectively. Total dividends in arrears, on
a per share basis, consist of the following at June 30:

                                                           2002         2001
                                                        ----------   ----------
6% Convertible
     Series A                                           $       13   $       13
     Series B                                                   13           12

5% Convertible
     Series A                                                   53           52
     Series B                                                   53           52


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

The Company has the privilege of redemption of 5% convertible cumulative
preferred stock at $21.00 a share plus unpaid accrued dividends. In the event of
voluntary or involuntary liquidation, holders of this stock are entitled to
receive $20.00 a share plus unpaid accrued dividends. It may be exchanged for
common stock at the option of the shareholders, in the ratio of 3.795 common
shares for one of preferred.

NOTE 5 - PROVISION FOR INCOME TAXES

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

<TABLE>
<CAPTION>
                                                         2002         2001         2000
                                                      ----------   ----------   ----------
<S>                                                   <C>          <C>          <C>
Federal income tax                                    $      839   $   (4,898)  $    9,213
State income tax                                             345       (1,887)       3,190
                                                      ----------   ----------   ----------

    Total provision for income taxes                  $    1,184   $   (6,785)  $   12,403
                                                      ==========   ==========   ==========
</TABLE>

The Company's provision for income taxes differs from the tax that would result
from applying statutory federal and state income tax rates primarily because of
nondeductible expenses.

                                       24

<PAGE>

                    CHASE GENERAL CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - LOSS PER SHARE

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

<TABLE>
<CAPTION>
                                                           2002         2001         2000
                                                        ----------   ----------   ----------
<S>                                                     <C>          <C>          <C>
Net income (loss)                                       $    1,390   $  (27,191)  $   42,284
                                                        ----------   ----------   ----------
Preferred dividend requirements:
   6% Prior Cumulative Preferred, $5 par value              60,000       60,000       60,000
   5% Convertible Cumulative Preferred, $20 par value       68,072       68,072       68,072
                                                        ----------   ----------   ----------

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

         Net loss - common stockholders                 $  126,682   $ (155,263)  $  (85,788)
                                                        ==========   ==========   ==========

      Weighted average of outstanding common shares        969,834      969,384      969,834
                                                        ==========   ==========   ==========

         Loss per share                                 $     (.13)  $     (.16)  $     (.09)
                                                        ==========   ==========   ==========
</TABLE>

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


NOTE 7 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

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


NOTE 8 - CONCENTRATION OF CREDIT RISK

For the years ending June 30, 2002 and 2001, two customers accounted for 36.56%
and 54.18%, respectively, of the gross sales. For the year ending June 30, 2002
one customer accounted for 30.42% of accounts receivable and for the year ending
June 30, 2001 one customer accounted for 38.89% of accounts receivable.

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

                                       25

<PAGE>

                                    PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

           (a) Directors

<TABLE>
<CAPTION>
                       Name             Age        Periods of Service as Director          Terms
               --------------------   -------   ------------------------------------   --------------
               <S>                    <C>       <C>                                    <C>
               Barry M. Yantis          57                  1980 to present               One year
               Brian A. Yantis          56             July 16, 1986 to present           One year
               Brett A. Yantis          34            January 21, 1999 to present         One year
</TABLE>

               An insufficient number of proxies were returned by the
               shareholders for the January 19, 2002 annual stockholder meeting.
               Therefore, the Directors noted above are continuing for an
               additional one-year term.

               See Item 10(b) for offices held by Barry M. Yantis and Brian A.
               Yantis.

           (b) Executive Officers

<TABLE>
<CAPTION>
                                                                           Years of
                                                                          Service as
                       Name             Age          Position             an Officer                  Term
               --------------------   -------   --------------------   ---------------   -----------------------------
               <S>                    <C>       <C>                    <C>               <C>
               Barry M. Yantis           57     President and                 23            Until successor elected
                                                  Treasurer

               Brian A. Yantis           56     Vice-President                11            Until successor elected
                                                  and Secretary
</TABLE>

           (c) Certain Significant Employees

               There are no significant employees other than above.

           (d) Family Relationships

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

           (e) Business Experience

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

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

               Brett A. Yantis was elected to the position of director during
               the year ending June 30, 1999. Brett has been associated with the
               Company for eight years.

                                   (Continued)

                                       26

<PAGE>

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

                (2)   The directors and executive officers listed above are
                      Candy Company.

          (f)   Involvement in Certain Legal Proceedings

                Not applicable

          (g)   Promoters and Control Persons

                Not applicable

ITEM 11 - EXECUTIVE COMPENSATION

          (a)   General

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

          (b)

<TABLE>
<CAPTION>
                                           Summary Compensation Table

                                                                             Long Term Compensation
                                                                            ---------------------------------
                                               Annual Compensation                    Awards          Payouts
                                     -------------------------------------- ---------------------- ----------
                                                                  Other     Restricted
       Name and        Fiscal                                    Annual       Stock       Option/     LTIP     All other
  Principal Position  Year End        Salary      Bonus       Compensation  Award (s)     SARs (#)   Payouts  Compensation
  ------------------ -----------    ----------  ---------    -------------- ----------    -------- ---------- ------------
<S>                  <C>            <C>         <C>          <C>            <C>           <C>      <C>        <C>
  Barry M. Yantis    1) 06-30-02    $  106,000  $      --      $    5,000       --           --          --        --

  Barry M. Yantis    1) 06-30-01    $  115,800  $  10,000      $    2,240       --           --          --        --

  Barry M. Yantis    1) 06-30-00    $  112,800  $  10,000      $    2,240       --           --          --        --

  Barry M. Yantis    1) 06-30-99    $  112,950  $   8,000      $    2,240       --           --          --        --
</TABLE>

          1) CEO

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

          3) No other officers are compensated 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

                                   (Continued)

                                       27

<PAGE>

ITEM 11 - EXECUTIVE COMPENSATION (CONTINUED)

          (e)   Long-term incentive awards table

                Not applicable

          (f)   Defined benefit or actuarial plan disclosure

                Not applicable

          (g)   Compensation of Directors

                Directors are not compensated for services on the board. The
                directors are reimbursed for travel expenses incurred in
                attending board meetings. During the fiscal year 2002, $247 of
                travel expenses were reimbursed to board members, Brian A.
                Yantis, and Barry M. Yantis, respectively.

          (h)   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.

          (i)   Report on repricing of option/SARs

                Not applicable

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

                The registrant has no formal compensation committee. The board
                of directors, Brian A. Yantis, Barry M. Yantis, and Brett A.
                Yantis annually approve the compensation of Barry M. Yantis,
                CEO.

          (k)   Board compensation committee report on executive compensation

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

          (l)   Performance graph

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

                                   (Continued)

                                       28

<PAGE>

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

<TABLE>
<CAPTION>
                                                                                       Amounts
                                                                                         and
                                                                                       Nature
                                                                                         of
                                                                                     Beneficial
                         Title of Class                   Name and Address           Ownership        % of Class
               ---------------------------------     --------------------------     ------------     ------------
          <S>                                        <C>                            <C>              <C>
          (a)  Security ownership of certain beneficial owners

               Common; par value $1 per share        Barry Yantis                    194,385 (1)      16.8%  (2)
                                                     5605 Osage Drive
                                                     St. Joseph, Mo.
                                                     64503

                                                     Brian Yantis                     97,192 (1)       8.4%  (2)
                                                     1210 E. Clarendon
                                                     Arlington Heights, IL.
                                                     60004

          (b)  Security ownership of management

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

               Prior Cumulative Preferred,           All directors and officers       21,533          21.5%
               $5 par value: Series A,               as a group
               6% convertible

               Prior Cumulative Preferred            All directors and officers       21,533          21.5%
               $5 par value: Series B,               as a group
               6% convertible

               Cumulative Preferred, $20 par         All directors and officers        3,017           5.2%
               value: Series A, $5 convertible       as a group
</TABLE>

<TABLE>
<CAPTION>
                                                                                       Amounts
                                                                                         and
                                                                                       Nature
                                                                                         of
                                                                                     Beneficial
                         Title of Class                   Name and Address           Ownership        % of Class
               ---------------------------------     --------------------------     ------------     ------------
          <S>                                        <C>                            <C>              <C>
               Cumulative Preferred, $20 par         All directors and officers          630           6.6%
               value: Series B, $5 convertible       as a group

                (1)  Includes 180,721 shares which could be received within 30 days upon conversion of preferred
                     stock.

                (2)  Reflects the percentage 291,577 shares would represent if the 180,721 shares above were
                     converted to common stock.

          (c)  No known change of control is anticipated.
</TABLE>

                                   (Continued)

                                       29

<PAGE>

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          (a) Transactions with management and others

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

          (b) Certain business relationships

              Not applicable

          (c) Indebtedness of management

              Not applicable

          (d) Transactions with promoters

              Not applicable

                                     PART IV

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

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

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

<TABLE>
<CAPTION>
                                                                                Page Number
                                                                                -----------
                  <S>                                                           <C>
                  Independent Auditor's Report                                    12
                  Consolidated Balance Sheets - June 30, 2002 and 2001            13 - 14
                  Consolidated Statements of Operations for the years
                     ended June 30, 2002, 2001, and 2000                          15
                  Consolidated Statements of Stockholders' Equity for
                     the years ended June 30, 2002, 2001, and 2000                16
                  Consolidated Statements of Cash Flows for the years
                     ended June 30, 2002, 2001, and 2000                          17 - 18
                  Summary of Significant Accounting Policies                      19 - 20
                  Notes to Consolidated Financial Statements                      21 - 25
</TABLE>

                                   (Continued)

                                       30

<PAGE>

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

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

<TABLE>
<CAPTION>
                                                                                        Page Number
                                                                                        -----------

<S>                                                                                     <C>
                    Independent Auditor's Report on Supplemental Schedules                  32

                    Schedule   I: Condensed Financial Information of the Registrant         33 - 36

                    Schedule  II: Valuation and Qualifying Accounts,
                                     June 30, 2002, 2001, and 2000                          37
</TABLE>

          (b)  Reports on Form 8-K

               No reports on Form 8-K were filed during the fourth quarter of
               the year ended June 30, 2002.

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

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

               (3) Articles of Incorporation and By-Laws

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

               (4)  Rights of security holders including indentures - Refer to
                    Notes 1 and 4.
               (11) Computation of per share earnings - Refer to Note 6.
               (21) Subsidiaries of registrant - Refer to "Summary of
                    Significant Accounting Policies" on page 19.

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

               Schedules required by Regulation S-X contained on page 33 through
               37 have been excluded from the annual report to the shareholders.

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

               (1)  With this filing, the Registrant is furnishing to the
                    Commission four (4) copies of the Proxy Statement
                    regarding the January 14, 2002 annual meeting mailed to
                    security holders during the 2002 fiscal year.

               (2)  For the 2002 fiscal year, the Registrant will furnish a
                    copy of the annual report and any Proxy information to the
                    Commission at time the aforementioned are mailed to security
                    holders.

                                       31

<PAGE>

             INDEPENDENT AUDITOR'S REPORT ON SUPPLEMENTAL SCHEDULES

In connection with the audits of the consolidated financial statements of Chase
General Corporation and subsidiary, we have also audited supplemental schedules
I and II. In our opinion, these schedules present fairly, in all material
respects, in relation to the consolidated financial statements taken as a whole,
the information required to be stated therein.

                                                       /s/ Clifton Gunderson LLP

Clifton Gunderson LLP
St. Joseph, Missouri
August 22, 2002

                                       32

<PAGE>

                                                                      SCHEDULE I

                    CHASE GENERAL CORPORATION AND SUBSIDIARY
                CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

                            CHASE GENERAL CORPORATION
                                (Registrant Only)
                           CONDENSED BALANCE SHEETS

                             June 30, 2002 and 2001

<TABLE>
<CAPTION>
                                     ASSETS

                                                                          2002          2001
                                                                      -----------    -----------
<S>                                                                   <C>            <C>
Investment in subsidiary - at equity                                  $   612,188    $   639,759
                                                                      -----------    -----------

TOTAL ASSETS                                                          $   612,188    $   639,759
                                                                      ===========    ===========


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Series B notes payable and accrued interest, unrelated parties        $    23,576    $    52,127
Series B notes payable and accrued interest, related parties               31,296         31,706
                                                                      -----------    -----------

     Total liabilities                                                     54,872         83,833
                                                                      -----------    -----------

Capital stock                                                           3,331,274      3,331,274
Paid in capital in excess of par                                        3,134,722      3,134,722
Accumulated (deficit)                                                  (5,908,680)    (5,910,070)
                                                                      -----------    -----------

     Total stockholders' equity                                           557,316        555,926
                                                                      -----------    -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                            $   612,188    $   639,759
                                                                      ===========    ===========
</TABLE>

(1)  The restricted assets of 100% consolidated subsidiary, Dye Candy Company,
     are $711,416 and $714,901 as of June 30, 2002 and 2001, respectively. See
     "Notes to Financial Statements" in Part II of this report for restrictions.

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

                                   (Continued)

                                       33

<PAGE>

                                                                      SCHEDULE I
                                                                     (Continued)


                    CHASE GENERAL CORPORATION AND SUBSIDIARY
                CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

                            CHASE GENERAL CORPORATION
                                (Registrant Only)
                       CONDENSED STATEMENTS OF OPERATIONS
                    Years Ended June 30, 2002, 2001 and 2000

<TABLE>
<CAPTION>
                                                               2002             2001              2000
                                                          --------------   --------------    --------------
<S>                                                       <C>              <C>               <C>
REVENUE

     Equity in net income (loss) of subsidiary            $       14,000   $      (15,745)   $       53,082
                                                          --------------   --------------    --------------

         Total revenue                                            14,000          (15,745)           53,082
                                                          --------------   --------------    --------------

EXPENSE

     General and administrative                                   11,546            8,399             4,645
     Interest                                                      3,861            6,160             8,842
                                                          --------------   --------------    --------------

         Total expense                                            15,407           14,559            13,487
                                                          --------------   --------------    --------------

              Income (loss) before income taxes                   (1,407)         (30,304)           39,595

PROVISION (CREDIT) FOR
     INCOME TAXES                                                 (2,797)          (3,113)            2,689
                                                          --------------   --------------    --------------

NET INCOME (LOSS)                                         $        1,390   $      (27,191)   $       42,284
                                                          ==============   ==============    ==============
</TABLE>

                                   (Continued)

                                       34

<PAGE>

                                                                      SCHEDULE I
                                                                     (Continued)


                    CHASE GENERAL CORPORATION AND SUBSIDIARY
                CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

                            CHASE GENERAL CORPORATION
                                (Registrant Only)
                       CONDENSED STATEMENTS OF CASH FLOWS
                    Years Ended June 30, 2002, 2001 and 2000

<TABLE>
<CAPTION>
                                                                         2002           2001            2000
                                                                     -----------     -----------    -----------
<S>                                                                  <C>             <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES

     General and administrative expenses paid                        $   (11,546)    $    (8,399)   $    (4,645)
     Interest paid                                                        (6,160)         (8,842)       (10,571)
     Income tax refund received                                           (3,113)          2,689          2,946
                                                                     -----------     -----------    -----------

         Net cash used in operating activities                           (20,819)        (14,552)       (12,270)
                                                                     -----------     -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES

     Advances received from wholly owned subsidiary                       47,481          64,552         47,270
                                                                     -----------     -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES

     Principal payments on Series B notes payable                        (26,662)        (50,000)       (35,000)
                                                                     -----------     -----------    -----------

NET DECREASE IN CASH AND
     CASH EQUIVALENTS                                                         --              --             --

CASH AND CASH EQUIVALENTS,
     BEGINNING OF YEAR                                                        --              --             --
                                                                     -----------     -----------    -----------

CASH AND CASH EQUIVALENTS,
     END OF YEAR                                                     $        --     $        --    $        --
                                                                     ===========     ===========    ===========
</TABLE>

                                   (Continued)

                                       35

<PAGE>

                                                                      SCHEDULE I
                                                                     (Continued)


                    CHASE GENERAL CORPORATION AND SUBSIDIARY
                CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

                            CHASE GENERAL CORPORATION
                                (Registrant Only)
                       CONDENSED STATEMENTS OF CASH FLOWS
                    Years Ended June 30, 2002, 2001 and 2000

<TABLE>
<CAPTION>
                                                                                 2002           2001            2000
                                                                             -----------     -----------    -----------
<S>                                                                          <C>             <C>            <C>
RECONCILIATION OF NET INCOME TO NET
     CASH USED IN OPERATING ACTIVITIES

     Net income (loss)                                                       $     1,390     $   (27,191)   $    42,284
     Adjustments to reconcile net income (loss) to net cash
         used in operating activities:
         Net (income) loss from wholly owned subsidiary                          (14,000)         15,745        (53,082)
         Effects of changes in operating assets and liabilities:
              Accrued interest                                                    (2,299)         (2,550)        (1,729)
              Income tax refund receivable                                        (5,910)           (556)           257
                                                                             -----------     -----------    -----------

NET CASH USED IN OPERATING ACTIVITIES                                        $   (20,819)    $   (14,552)   $   (12,270)
                                                                             ===========     ===========    ===========
</TABLE>

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

                                       36

<PAGE>

                                                                     SCHEDULE II


                    CHASE GENERAL CORPORATION AND SUBSIDIARY
                        VALUATION AND QUALIFYING ACCOUNTS
                          June 30, 2002, 2001, and 2000

<TABLE>
<CAPTION>
               Column A                      Column B            Column C Additions           Column D          Column E
--------------------------------------  ------------------  ----------------------------  ----------------  ---------------
                                            Balance at               Charged to                                  Balance
                                             Beginning                  Costs                                    at end
              Description                    of Period              and Expenses            Deductions *        of Period
--------------------------------------  ------------------  ----------------------------  ----------------  ---------------
<S>                                     <C>                 <C>                           <C>               <C>
Valuation accounts deducted from
    assets to which they apply for
    doubtful accounts receivable:

    June 30, 2002                             $10,669                 $  1,333                 $   2,168       $   9,834
    June 30, 2001                              11,393                    2,225                     2,949          10,669
    June 30, 2000                              11,516                   20,603                    20,726          11,393
</TABLE>

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

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

                                       37

<PAGE>

                                   SIGNATURES

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

                                          CHASE GENERAL CORPORATION
                                          (Registrant)

Date: 9/24/02                          By: /s/ Barry M. Yantis
-------------------------                  -------------------------------------
                                           Barry M. Yantis, President

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

<TABLE>
<S>                                   <C>                                            <C>
                                      President, Treasurer (Principal Executive
                                      Officer and Chief Financial and Accounting
/s/ Barry M. Yantis                   Officer) and Director                           9/24/02
-----------------------------------                                                  -------
Barry M. Yantis                                                                        Date

/s/ Brian M. Yantis                   Vice-President, Secretary and Director          9/24/02
-----------------------------------                                                  --------
Brian A. Yantis                                                                        Date
</TABLE>

                                       38