##### Table of Contents

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K



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

For the Fiscal Year Ended June 30, 2011



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

For transition period from            
to

Commission File Number:
2-5916

Chase General Corporation

(Exact name of registrant as specified in its charter)



|                                         |  |                       
|---------------------------------------- |  | ----------------------
|Missouri                                 |  | 36-2667734            
|(State or other jurisdiction of          |  | (I.R.S. Employer      
|incorporation or organization)           |  | Identification Number)
|                                         | 
|1307 South 59th, St. Joseph, Missouri    |  | 64507                 
|(Address of Principal Executive Offices) |  | Zip Code              

(816) 279-1625

(Registrants telephone number, including area code)

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

None

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

None

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes  [  ]    No  [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes  [  ]    No  [X]

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

Indicate by check mark whether the registrant (1) has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes  [  ]    No  [  ]

Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrants knowledge, in definitive proxy or information statements incorporated
by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  [X]

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



|                              |  |                         |  |                               |  |                               
|----------------------------- |  | ----------------------- |  | ----------------------------- |  | ------------------------------
|                              |  |                         | 
|Large accelerated filer  [  ] |  | Accelerated filer  [  ] |  | Non-accelerated filer    [  ] |  | Smaller reporting company  [X]

Indicate by check mark whether the registrant is a shell Company (as defined in Rule 12b-2 of the
Exchange Act).

Yes  [  ]     No  [X]

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

As of September 15, 2011 there were
969,834 shares of Common Stock $1.00 par value, outstanding.



---

##### Table of Contents

CHASE GENERAL CORPORATION

ANNUAL REPORT ON FORM 10-K

For the Year Ended June 30, 2011

TABLE OF
CONTENTS



|           |  |                                                                                                              |    |  |    | 
|---------- |  | ------------------------------------------------------------------------------------------------------------ | -- |  | -- | 
|PART I     |  |                                                                                                              |    |  |    | 
|Item 1.    |  | Business.                                                                                                    |    |  | 3  | 
|Item 1A.   |  | Risk Factors                                                                                                 |    |  | 6  | 
|Item 1B.   |  | Unresolved Staff Comments                                                                                    |    |  | 6  | 
|Item 2.    |  | Property                                                                                                     |    |  | 7  | 
|Item 3.    |  | Legal Proceedings                                                                                            |    |  | 7  | 
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                                          |    |  | 7  | 
|           |  |                                                                                                             
|PART II    |  |                                                                                                              |    |  |    | 
|Item 5.    |  | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |    |  | 8  | 
|Item 6.    |  | Select Financial Data                                                                                        |    |  | 8  | 
|Item 7.    |  | Managements Discussion and Analysis of Financial Conditions and Results of Operations                       |    |  | 9  | 
|Item 7A.   |  | Quantitative and Qualitative Disclosures About Market Risk                                                   |    |  | 16 | 
|Item 8.    |  | Consolidated Financial Statements and Supplementary Data                                                     |    |  | 16 | 
|Item 9.    |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                         |    |  | 35 | 
|Item 9A(T) |  | Controls and Procedures                                                                                      |    |  | 35 | 
|Item 9B.   |  | Other Information                                                                                            |    |  | 35 | 
|           |  |                                                                                                             
|PART III   |  |                                                                                                              |    |  |    | 
|Item 10.   |  | Directors, Executive Officers, and Corporate Governance                                                      |    |  | 36 | 
|Item 11.   |  | Executive Compensation                                                                                       |    |  | 37 | 
|Item 12.   |  | Security Ownership of Certain Beneficial Owners and Management                                               |    |  | 39 | 
|Item 13.   |  | Certain Relationships and Related Transactions, and Director Independence                                    |    |  | 40 | 
|Item 14.   |  | Principal Accountant Fees and Services                                                                       |    |  | 40 | 
|           |  |                                                                                                             
|PART IV    |  |                                                                                                              |    |  |    | 
|Item 15.   |  | Exhibits and Financial Statement Schedules                                                                   |    |  | 41 | 
|SIGNATURES |  |                                                                                                              | 42 | 



2



---

##### Table of Contents

PART I

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



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

Chase General Corporation was incorporated November 6, 1944 for the purpose of manufacturing confectionery products. In 1970, Chase General Corporation acquired a 100% interest in its wholly-owned
subsidiary, Dye Candy Company. (Chase General Corporation and Dye Candy Company are sometimes referred herein as the Company). This subsidiary is the main operating company for the reporting entity.

PRINCIPAL PRODUCTS AND SERVICES AND METHODS OF DISTRIBUTION

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

The principal products produced are as follows:

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



| | (1) | 60 count pack
| | --- | -------------

| | (2) | 12 boxes of 24 bars per box
| | --- | ---------------------------

| | (3) | 200 count shipper box
| | --- | ---------------------

| | (4) | 100 count shipper box
| | --- | ---------------------

| | (5) | 100 # 2 box Counter Display
| | --- | ---------------------------

| | (6) | 4 box - 36 count Counter Display
| | --- | --------------------------------

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



| | (1) | 24 - 12 oz. bags
| | --- | ----------------

| | (2) | 6 jars - 60 bars per jar
| | --- | ------------------------

| | (3) | 23 # wrapped bars
| | --- | -----------------

| | (4) | 22 # unwrapped bars
| | --- | -------------------

| | (5) | 12 - 12 oz. bags
| | --- | ----------------

| | (6) | 6 - 4 # jars
| | --- | ------------

| | (7) | 24 - 12 oz. clamshell containers
| | --- | --------------------------------



3



---

##### Table of Contents

DESCRIPTION OF BUSINESS(CONTINUED)



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



| |  |                          |  |                         
| |  | ------------------------ |  | ------------------------
| |  | (1) Coconut Bon-Bons     |  | (6) Peanut Brittle      
| |  | (2) Coconut Stacks       |  | (7) Peanut Clusters     
| |  | (3) Home Style Poe Fudge |  | (8) Champion Crème Drops
| |  | (4) Peco Flake           |  | (9) Jelly Candies       
| |  | (5) Peanut Squares       |  | (10) Frosted Pretzels   

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

All products are shipped to customers by commercial haulers.

COMPETITION AND MARKET AREA

The Chase Candy Division bars are sold primarily to wholesale candy and tobacco jobbing houses, grocery accounts, vendors and repackers. Cherry Mash bars are marketed in the Midwest region of
the United States. For the years ended June 30, 2011 and 2010, this division accounted for 55% and 58%, respectively, of the consolidated revenue of Dye Candy Company.

The Seasonal Candy Division is sold primarily on a Midwest regional basis to national syndicate accounts, repackers, and grocery accounts. For the years ended June 30, 2011 and 2010, the division
accounted for 45% and 42%, respectively, of the consolidated revenue of Dye Candy Company. The Company has no government contracts, foreign operations or export sales. In addition, all domestic sales are primarily in the Midwest region of the United
States.

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

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

(Continued)



4



---

##### Table of Contents

COMPETITION AND MARKET AREA(CONTINUED)



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

The confectionery market for the type of product produced by the divisions of Dye Candy Company is very competitive and quality minded.
The confectionery (candy) industry in which the divisions operate is highly competitive with many small companies and, within certain specialized areas, a few competitors dominate. In the United States, the dominant competitors in the coconut candy
industry are Crown Candy Company, Vermico Candy Company, and the Seasonal Candy Division of Dye Candy Company with approximately 70% of the market share among them. In the United States, Old Dominion has approximately 80% of the market share of the
peanut candy business in which the Seasonal Candy Division operates. Dye Candy Company sells approximately 95% of its products in the Midwest region with seasonal orders being shipped to the Southern and Eastern regions of the United States. Except
for the coconut candy industry, Dye Candy Company is not a dominant competitor in any of the candy industries in which it competes. Dye Candy Companys market share in the coconut industry does not vary significantly from year to year.

Principal methods of competition the Company uses include quality of product, price, reduced transportation costs due to
central location, and service. The Companys competitive position is positively influenced by labor costs being lower than industry average. Chase General Corporation is firmly established in the confectionery market and through its operating
divisions has many years of experience associated with its name.

RESEARCH AND DEVELOPMENT

The Company has not developed any new products during fiscal years ending June 30, 2011 and 2010.

RAW MATERIALS AND PRINCIPAL SUPPLIERS

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

PATENTS AND TRADEMARKS

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



5



---

##### Table of Contents

EMPLOYEES

As of June 30, 2011, the Company had 21 full time employees. There were 13 in manufacturing, 2 in maintenance, 1 plant manager, 11/2in sales and marketing, 21/2in finance and administration, and 1 in general office. This
expands to approximately 31 full time personnel during the two busy production seasons of spring and fall.

CUSTOMERS

For the years ending June 30, 2011 and 2010, Associated Wholesale Grocers accounted for 31% and 22% of gross sales, and 36% and 8%, respectively, of accounts receivable. For the years ending
June 30, 2011 and 2010, Wal-Mart and its affiliates accounted for 12% and 17%, respectively of gross sales, and 16% and 44%, respectively, of accounts receivable. No other customer accounted for more than 10% of the Companys revenues in
fiscal years 2011 and 2010.

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

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

NEED FOR GOVERNMENT APPROVAL OF PRINCIPAL
PRODUCTS OR SERVICES

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

REPORTS TO SECURITY HOLDERS

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



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

Not
applicable to smaller reporting company.



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

The Company has no unresolved SEC staff comments at June 30, 2011.



6



---

##### Table of Contents

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

We conduct
our operations from two buildings as follows:

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

Chase General Office and Dye Candy Company Operating Plant - The building located at 1307 South 59th, St. Joseph, Missouri contains the general offices (of approximately 2,000 square feet) for Chase General Corporation,
Dye Candy Company and its divisions. The production plant of Dye Candy Company occupies the remainder of the building or 18,000 square feet. The building, specifically designed for the Company, is leased from an entity owned by the Vice-President
and Director of the Company and his spouse. The annual rental of this facility was $78,000 for each year ended June 30, 2011 and 2010.

The net book value of our premises, land and office, and production equipment was $497,909 and $512,069, respectively, for fiscal years ending June 30, 2011 and 2010.

We believe both facilities are adequately covered by insurance.



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

None



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

No matters were submitted to a vote of the Companys security holders during the fourth quarter of the fiscal year ended
June 30, 2011.



7



---

##### Table of Contents

PART II



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

Market information

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

Security holders

As of September 15, 2011, the latest practicable
date, the approximate number of record holders of common stock was 1,869, including individual participants in security listings.

Dividends



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

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



| | (2) | Dividend policy
| | --- | ---------------

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

Securities authorized for issuance under equity compensation plans

The Company does not have any equity compensation plans.



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

Not applicable to a smaller reporting company.



8



---

##### Table of Contents

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

FORWARD-LOOKING STATEMENTS

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

OVERVIEW

During fiscal year ended 2011, the Companys net sales
were $2,996,319, as compared to net sales of $2,940,935 for fiscal year ended June 30, 2010. This 1.9% increase in volume offset by a 4.1% increase in cost of sales resulted in decreased profitability during the year, as reflected in net income
before income taxes of $14,748 for fiscal year 2011 compared to $177,816 for fiscal year 2010. Working capital increased $14,893 to $557,964 for the current year from $543,071 for the fiscal year 2010 due to an increase in inventory offset by a
decrease in cash and an increase in accounts payable.

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

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

GENERAL

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



9



---

##### Table of Contents

GENERAL(CONTINUED)



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

REVENUE RECOGNITION

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

RECEIVABLES

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

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

INVENTORIES

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

IMPAIRMENT OF LONG-LIVED ASSETS

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



10



---

##### Table of Contents

RESULTS OF OPERATIONS

The following table sets forth for the years indicated, the percentage of net sales of certain items in the Companys consolidated
statements of operations for each of the fiscal years ended June 30, 2011 and 2010, respectively:



|                                                |  |      |        |    |      |  |        |   
|----------------------------------------------- |  | ---- | ------ | -- | ---- |  | ------ | --
|                                                |  | 2011 |        |    | 2010 | 
|                                                |  |     
|Net sales                                       |  |      | 100.00 | %  |      |  | 100.00 | % 
|Cost of sales                                   |  |      | 73.29  |    |      |  | 71.70  |   
|                                                |  |      |        |    |      |  |        |   
|Gross profit                                    |  |      | 26.71  |    |      |  | 28.30  |   
|Selling expense                                 |  |      | 12.88  |    |      |  | 11.13  |   
|General and administrative expense              |  |      | 13.09  |    |      |  | 10.99  |   
|                                                |  |      |        |    |      |  |        |   
|Income from operations                          |  |      | .74    |    |      |  | 6.18   |   
|Other income (expense), net                     |  |      | (.25   | )  |      |  | (.13   | ) 
|                                                |  |      |        |    |      |  |        |   
|Income before income taxes                      |  |      | .49    |    |      |  | 6.05   |   
|Provision for (benefit from) income taxes       |  |      | .18    |    |      |  | 2.41   |   
|                                                |  |      |        |    |      |  |        |   
|Net income                                      |  |      | .31    |    |      |  | 3.64   |   
|Preferred dividends                             |  |      | (4.27  | )  |      |  | (4.35  | ) 
|                                                |  |      |        |    |      |  |        |   
|                                                |  |     
|Income (loss) applicable to common stockholders |  |      | (3.96  | )% |      |  | (.71   | )%
|                                                |  |      |        |    |      |  |        |   

FISCAL YEAR 2011 COMPARED TO FISCAL YEAR 2010

NET SALES

During the year ended June 30, 2011, sales, net of returns and allowances, increased $55,384 or 1.88% as compared to the year ended June 30, 2010. Gross sales for Chase Candy products decreased
$50,980 or 2.96% to $1,673,979 for the year ended June 30, 2011 compared to $1,724,959 for 2010. Gross sales for seasonal candy increased $149,391 or 11.92% to $1,402,649 for the year ended June 30, 2011 as compared to $1,253,258 for 2010.

The 2.96% decrease in gross sales of Chase Candy of $50,980 for the year ended June 30, 2011 over the same period ended
June 30, 2010, is primarily due to the discontinuation of the Mini Mash Limited Edition Tin and decreased orders of the Cherry Mash Bar to two customers offset by increased sales to Cherry Mash merchandisers. The 11.92% increase in gross sales
of Seasonal Candy of $149,391 for the year ended June 30, 2011 over the same period ended June 30, 2010, is primarily due to increased orders from two customers.

The Companys returns and allowances increased $492 or 3.30% for the year ended June 30, 2011, compared to the year ended June 30, 2010.



11



---

##### Table of Contents

COST OF SALES

Cost of sales for the year ended June 30, 2011, as compared to the year ended June 30, 2010, increased by 4.14%. The cost of
sales increased $87,308 to $2,196,051 while increasing to 73.29 % of related revenues for the year ended June 30, 2011, compared to $2,108,743 or 71.70% of related revenues for the year ended June 30, 2010.

The dollar increase in cost of sales for the year ended June 30, 2011 was the result of raw material costs of $1,169,620 increasing
20.90% or $202,206 for year ended June 30, 2011, as compared to $967,413 for year ending 2010. This increase is primarily due to raw material price increases in chocolate, peanuts, and sugar which were not passed along to customers.

Labor costs including wages, vacation pay and payroll taxes of $440,419 for the year ended June 30, 2011 increased 1.52% or $6,576
as compared to $433,663 for the period ending 2010. The increase was due to increased production.

GROSS PROFIT

The gross margin decreased 3.84% or $31,924 to $800,268 decreasing to 26.71% of related revenues for the year ended
June 30, 2011, as compared to $832,192 or 28.3% of related revenues for the year ended June 30, 2010, as a result of the overall increase in cost of sales.

Finished goods inventory as of June 30, 2011 of $263,934 increased $159,912 or 153.73% from the June 30, 2010 finished goods inventory of $104,022. This increase was due to building up inventory
when the plant closed for vacation the first of July and the start of the busy season beginning at an earlier date in 2011. In 2010, a new wrapper machine had not been installed in time to start at an earlier date. Raw materials inventory as of
June 30, 2011 of $88,490 decreased $20,537 or 18.84% of the June 30, 2010 raw materials inventory of $109,027. This decrease was due to building up a larger finished goods inventory for the start of an earlier busy season.

SELLING EXPENSES

Selling expenses for the year ended June 30, 2011 increased $58,605 to $386,019, which is 17.90% of sales, compared to $327,413 or 11.13% of sales for the year June 30, 2010. This increase is
primarily due to higher commissions and premium promotions being paid, and sample costs for the period in an effort to increase sales volume. Commissions and premium promotions, and sample costs increased $44,873 or 28.98% to $199,701 for the year
ended June 30, 2011, as compared to $154,828 for the year ending June 31, 2010.

GENERAL AND ADMINISTRATIVE
EXPENSES

General and administrative expenses for the year ended June 30, 2011 increased $68,944 to $392,164, which
is 13.09% of sales, compared to $323,221 or 10.99% of sales for the year ended June 30, 2010. The increased costs are primarily because of increases in employee health insurance, directors insurance, and enhancement costs made to the
Companys website.



12



---

##### Table of Contents

INCOME FROM OPERATIONS

Income from operations for the year ended June 30, 2011 was 0.74% of net sales, as compared to 6.18% of net sales for the year
ended June 30, 2010 for the reasons described above.

OTHER INCOME (EXPENSE)

Other income and (expense) reflects expense of $(7,837) for the year ended June 30, 2011, as compared to expense of $(1,903) for
the year ended June 30, 2010. This increase of $5,934 was primarily due to increased interest expense due to financing activities during the year ended June 30, 2010.

INCOME BEFORE INCOME TAXES

Income before income taxes was $14,748 for the year ended June 30, 2011, as compared to $177,816 for the year ended June 30, 2010. The reasons for the decrease of $163,068 have been discussed
above.

PROVISION FOR INCOME TAXES

The Company recorded a tax expense for the year ended June 30, 2011 of $5,401, as compared to a tax expense of $70,867 for the year ended June 30, 2010. The tax expense for the year ended
June 30, 2011 is a result of operations discussed above.

NET INCOME

Net income for the year ended June 30, 2011 was $9,347, compared to net income for the year ended June 30, 2010 of $106,949.
This decrease of $97,602 is the result of those items discussed above.

PREFERRED DIVIDENDS

Preferred dividends were $128,072 for the years ended June 30, 2011 and 2010, which reflect additional preferred stock dividends in
arrears on the Companys Series A and Series B $5 par value preferred stock and its Series A & B $20 par value preferred stock.

NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS

Net (loss)
applicable to common stockholders was $(118,725) for the year ended June 30, 2011, which is an increase of $97,602 as compared to net loss of $(21,123) for the year ended June 30, 2010 for the reasons discussed above.



13



---

##### Table of Contents

LIQUIDITY AND SOURCES OF CAPITAL

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



|                                                    |  |      |         |   |      |   |          |  
|--------------------------------------------------- |  | ---- | ------- | - | ---- | - | -------- | -
|                                                    |  | 2011 |         |   | 2010 |  
|                                                    |  |     
|Net cash provided by operating activities           |  | $    | 32,643  |   |      | $ | 203,958  |  
|Net cash used in investing activities               |  | $    | (32,988 | ) |      | $ | (260,770 | )
|Net cash provided by (used in) financing activities |  | $    | (87,391 | ) |      | $ | 134,549  |  

Operating Activities

The positive cash flow of $32,643 generated from operations is a result of the Company continuing to monitor raw material pricing, and when a price increase or decrease is anticipated, adjustments to
inventory levels are made accordingly. Finished goods inventory as of June 30, 2011 of $263,934 increased $159,912 or 153.73% of the June 30, 2010 finished goods inventory of $104,022. This increase was due to building up inventory for
when the plant closed for vacations the first of July and the start of the busy season beginning at an earlier date in 2011. In 2010, a new wrapper machine was not installed in time to start at an earlier date. Raw materials inventory as of
June 30, 2011 of $88,490 decreased $20,537 or 18.84% of the June 30, 2010 raw materials inventory of $109,027. This decrease was due to building up a larger finished goods inventory for the start of an earlier busy season.

Investing Activities

The $32,988 of cash used in investing activities was the net result of capital expenditures and disposal of equipment for the current fiscal year. The Company continues to write off equipment that is no
longer useful to the operations of the Company. Machinery and equipment purchases of $33,488 and $260,770 were made during the years ended June 30, 2011 and 2010, respectively. Depending on results of operations and cash flows, the Company has
plans to replace two cookers at an anticipated cost of $40,000 in the next several years, with no set target date. Equipment purchased for the 2010 year includes the acquisition of a new mini mash wrapper machine for $249,161.

Financing Activities

The Company borrowed $40,000 and $210,000, respectively, on its line-of-credit during the fall of 2010 and 2009 busy seasons. Payments of $40,000 and $210,000, respectively, were paid for years ending
June 30, 2011 and 2010. The Company renewed its $250,000 line-of-credit until January 3, 2012.

The Company
financed $71,750 of vehicle purchases during fiscal year 2011.

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

Loan payments were $87,391 and $29,360 for years ended June 30, 2011
and 2010, respectively.



14



---

##### Table of Contents

Overall cash and cash equivalents decreased $87,736 to $18,772 at June 30, 2011 from
$106,508 at June 30, 2010.

At June 30, 2011, the Companys accumulated deficit was $5,663,710, compared to
accumulated deficit of $5,673,057 as of June 30, 2010. Working capital as of June 30, 2011 increased 2.74% to $557,964 from $543,071 as of June 30, 2010.

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

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

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

IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS

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

In June
2009, the FASB issued new guidance on the consolidation of variable interest entities (VIE) in response to concerns about the application of certain key provision of pre-existing guidance, including those regarding the transparency of
the involvement with a VIE. Specifically, this new guidance requires a qualitative approach to identifying a controlling financial interest in a VIE and requires ongoing assessment of whether an interest in a VIE makes the holder the primary
beneficiary of the VIE and whether an entity is a VIE when a triggering event occurs. In addition, this new guidance requires additional disclosures about the involvement with a VIE and any significant changes in risk exposure due to that
involvement. This new guidance is effective for fiscal years beginning after November 15, 2009. The Company adopted the new guidance in the first quarter of fiscal year 2011, which did not have a material impact on its condensed consolidated
financial statements.



15



---

##### Table of Contents

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

Not applicable to a smaller reporting company.



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

The Consolidated Financial Statements meeting the requirements of Regulation S-B are contained on pages 17 through 34 of this Form 10-K.



16



---

##### Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

CONSOLIDATED FINANCIAL REPORT

Table of Contents



|                                                        |  |      |    | 
|------------------------------------------------------- |  | ---- | -- | 
|                                                        |  | PAGE |   
|                                                        | 
|Report of Independent Registered Public Accounting Firm |  |      | 18 | 
|                                                        | 
|Financial Statements                                    |  |      |    | 
|                                                        | 
|Consolidated Balance Sheets                             |  |      | 19 | 
|                                                        | 
|Consolidated Statements of Operations                   |  |      | 21 | 
|                                                        | 
|Consolidated Statements of Stockholders Equity         |  |      | 22 | 
|                                                        | 
|Consolidated Statements of Cash Flows                   |  |      | 23 | 
|                                                        | 
|Notes to Consolidated Financial Statements              |  |      | 24 | 



17



---

##### Table of Contents

LOGO

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

CHASE GENERAL
CORPORATION AND SUBSIDIARY

We have audited the accompanying consolidated balance sheets of Chase General Corporation and
Subsidiary (the Company) as of June 30, 2011 and 2010, and the related consolidated statements of operations, stockholders equity, and cash flows for the years then ended. These 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement.The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included
consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal
control over financial reporting. Accordingly, we express no such opinion. 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, 2011 and 2010, and the consolidated results of their operations and their cash flows for the years then ended, in conformity with U.S. generally accepted accounting
principles.

/s/ Mayer Hoffman McCann P.C

MAYER HOFFMAN MCCANN P.C.

Leawood, Kansas

September 22, 2011



18



---

##### Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

June 30, 2011 and 2010

ASSETS



|                                                                                                |  |      |           |  |      |   |           | 
|----------------------------------------------------------------------------------------------- |  | ---- | --------- |  | ---- | - | --------- | 
|                                                                                                |  | 2011 |           |  | 2010 |  
|CURRENT ASSETS                                                                                  |  |      |           |  |      |   |           | 
|Cash and cash equivalents                                                                       |  | $    | 18,772    |  |      | $ | 106,508   | 
|Trade receivables, net of allowance for doubtful accounts, of $15,383 and $14,891, respectively |  |      | 161,670   |  |      |   | 164,753   | 
|Inventories:                                                                                    |  |      |           |  |      |   |           | 
|Finished goods                                                                                  |  |      | 263,934   |  |      |   | 104,022   | 
|Goods in process                                                                                |  |      | 3,275     |  |      |   | 3,730     | 
|Raw materials                                                                                   |  |      | 88,490    |  |      |   | 109,027   | 
|Packaging materials                                                                             |  |      | 188,025   |  |      |   | 186,420   | 
|Prepaid expenses                                                                                |  |      | 5,047     |  |      |   | 4,959     | 
|Deferred income taxes                                                                           |  |      | 6,900     |  |      |   | 5,844     | 
|                                                                                                |  |      |           |  |      |   |           | 
|                                                                                                |  |     
|Total current assets                                                                            |  |      | 736,113   |  |      |   | 685,263   | 
|                                                                                                |  |      |           |  |      |   |           | 
|PROPERTY AND EQUIPMENT                                                                          |  |      |           |  |      |   |           | 
|Land                                                                                            |  |      | 35,000    |  |      |   | 35,000    | 
|Buildings                                                                                       |  |      | 85,738    |  |      |   | 85,738    | 
|Machinery and equipment                                                                         |  |      | 1,025,118 |  |      |   | 1,029,093 | 
|Trucks and autos                                                                                |  |      | 173,486   |  |      |   | 139,601   | 
|Office equipment                                                                                |  |      | 37,757    |  |      |   | 37,027    | 
|Leasehold improvements                                                                          |  |      | 71,481    |  |      |   | 71,481    | 
|                                                                                                |  |      |           |  |      |   |           | 
|Total                                                                                           |  |      | 1,428,580 |  |      |   | 1,397,940 | 
|Less accumulated depreciation                                                                   |  |      | 930,671   |  |      |   | 885,871   | 
|                                                                                                |  |      |           |  |      |   |           | 
|                                                                                                |  |     
|Total property and equipment                                                                    |  |      | 497,909   |  |      |   | 512,069   | 
|                                                                                                |  |      |           |  |      |   |           | 
|                                                                                                |  |     
|TOTAL ASSETS                                                                                    |  | $    | 1,234,022 |  |      | $ | 1,197,332 | 
|                                                                                                |  |      |           |  |      |   |           | 

The accompanying notes are an integral part of the

consolidated financial statements.



19



---

##### Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

June 30, 2011 and 2010

LIABILITIES AND STOCKHOLDERS EQUITY

|                                                                         |  |      |            |   |      |   |            |  
|------------------------------------------------------------------------ |  | ---- | ---------- | - | ---- | - | ---------- | -
|                                                                         |  | 2011 |            |   | 2010 |  
|CURRENT LIABILITIES                                                      |  |      |            |   |      |   |            |  
|Accounts payable                                                         |  | $    | 104,796    |   |      | $ | 68,734     |  
|Current maturities of notes payable                                      |  |      | 54,844     |   |      |   | 56,820     |  
|Accrued expenses                                                         |  |      | 17,210     |   |      |   | 15,337     |  
|Deferred income                                                          |  |      | 1,299      |   |      |   | 1,299      |  
|Income taxes payable                                                     |  |      | -          |   |      |   | 2          |  
|                                                                         |  |      |            |   |      |   |            |  
|                                                                         |  |     
|Total current liabilities                                                |  |      | 178,149    |   |      |   | 142,192    |  
|                                                                         |  |      |            |   |      |   |            |  
|LONG-TERM LIABILITIES                                                    |  |      |            |   |      |   |            |  
|Deferred income                                                          |  |      | 16,558     |   |      |   | 17,857     |  
|Notes payable, less current maturities                                   |  |      | 136,810    |   |      |   | 150,475    |  
|Deferred income taxes                                                    |  |      | 100,219    |   |      |   | 93,869     |  
|                                                                         |  |      |            |   |      |   |            |  
|                                                                         |  |     
|Total long-term liabilities                                              |  |      | 253,587    |   |      |   | 262,201    |  
|                                                                         |  |      |            |   |      |   |            |  
|                                                                         |  |     
|Total liabilities                                                        |  |      | 431,736    |   |      |   | 404,393    |  
|                                                                         |  |      |            |   |      |   |            |  
|                                                                         |  |     
|COMMITMENTS AND CONTINGENCIES                                            |  |      |            |   |      |   |            |  
|                                                                         |  |     
|STOCKHOLDERS EQUITY                                                     |  |      |            |   |      |   |            |  
|Capital stock issued and outstanding:                                    |  |      |            |   |      |   |            |  
|Prior cumulative preferred stock, $5 par value:                          |  |      |            |   |      |   |            |  
|Series A (liquidation preference $2,100,000 and $2,070,000 respectively) |  |      | 500,000    |   |      |   | 500,000    |  
|Series B (liquidation preference $2,055,000 and $2,025,000 respectively) |  |      | 500,000    |   |      |   | 500,000    |  
|Cumulative preferred stock, $20 par value                                |  |      |            |   |      |   |            |  
|Series A (liquidation preference $4,785,065 and $4,726,533 respectively) |  |      | 1,170,660  |   |      |   | 1,170,660  |  
|Series B (liquidation preference $779,821 and $770,281 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                                                      |  |      | (5,663,710 | ) |      |   | (5,673,057 | )
|                                                                         |  |      |            |   |      |   |            |  
|                                                                         |  |     
|Total stockholders equity                                               |  |      | 802,286    |   |      |   | 792,939    |  
|                                                                         |  |      |            |   |      |   |            |  
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                               |  | $    | 1,234,022  |   |      | $ | 1,197,332  |  
|                                                                         |  |      |            |   |      |   |            |  

The accompanying notes are an integral part of the

consolidated financial statements.



20



---

##### Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended June 30, 2011 and 2010



|                                                    |  |      |           |   |      |   |           |  
|--------------------------------------------------- |  | ---- | --------- | - | ---- | - | --------- | -
|                                                    |  | 2011 |           |   | 2010 |  
|                                                    |  |     
|NET SALES                                           |  | $    | 2,996,319 |   |      | $ | 2,940,935 |  
|                                                    |  |     
|COST OF SALES                                       |  |      | 2,196,051 |   |      |   | 2,108,743 |  
|                                                    |  |      |           |   |      |   |           |  
|                                                    |  |     
|Gross profit on sales                               |  |      | 800,268   |   |      |   | 832,192   |  
|                                                    |  |      |           |   |      |   |           |  
|                                                    |  |     
|OPERATING EXPENSES                                  |  |      |           |   |      |   |           |  
|Selling                                             |  |      | 386,019   |   |      |   | 327,413   |  
|General and administrative                          |  |      | 392,164   |   |      |   | 323,221   |  
|(Gain) loss on sale of equipment                    |  |      | (500      | ) |      |   | 1,839     |  
|                                                    |  |      |           |   |      |   |           |  
|                                                    |  |     
|Total operating expenses                            |  |      | 777,683   |   |      |   | 652,473   |  
|                                                    |  |      |           |   |      |   |           |  
|                                                    |  |     
|Income from operations                              |  |      | 22,585    |   |      |   | 179,719   |  
|                                                    |  |      |           |   |      |   |           |  
|                                                    |  |     
|OTHER INCOME (EXPENSE)                              |  |      |           |   |      |   |           |  
|Miscellaneous income                                |  |      | 2,341     |   |      |   | 2,224     |  
|Interest (expense)                                  |  |      | (10,178   | ) |      |   | (4,127    | )
|                                                    |  |      |           |   |      |   |           |  
|                                                    |  |     
|Total other income (expense)                        |  |      | (7,837    | ) |      |   | (1,903    | )
|                                                    |  |      |           |   |      |   |           |  
|                                                    |  |     
|Net income before income taxes                      |  |      | 14,748    |   |      |   | 177,816   |  
|                                                    |  |     
|PROVISION FOR INCOME TAXES                          |  |      | 5,401     |   |      |   | 70,867    |  
|                                                    |  |      |           |   |      |   |           |  
|                                                    |  |     
|NET INCOME                                          |  |      | 9,347     |   |      |   | 106,949   |  
|                                                    |  |     
|Preferred dividends                                 |  |      | (128,072  | ) |      |   | (128,072  | )
|                                                    |  |      |           |   |      |   |           |  
|Net loss applicable to common stockholders          |  | $    | (118,725  | ) |      | $ | (21,123   | )
|                                                    |  |      |           |   |      |   |           |  
|                                                    |  |     
|NET LOSS PER SHARE OF COMMON STOCK -                |  |      |           |   |      |   |           |  
|BASIC                                               |  | $    | (0.12     | ) |      | $ | (0.02     | )
|                                                    |  |      |           |   |      |   |           |  
|                                                    |  |     
|DILUTED                                             |  | $    | (0.12     | ) |      | $ | (0.02     | )
|                                                    |  |      |           |   |      |   |           |  
|                                                    |  |     
|WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING |  |      | 969,834   |   |      |   | 969,834   |  
|                                                    |  |      |           |   |      |   |           |  

The accompanying notes are an integral part of the

consolidated financial statements.



21



---

##### Table of Contents

CHASE GENERAL CORPORATION AN SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

Years Ended June 30, 2011 and 2010



|                       |  |                  |         |  |                 |   |         |          |  |   |           |  |  |             |         |  |         |   |         |         |  |   |           |  |  |   |            |   |  |   |         | 
|---------------------- |  | ---------------- | ------- |  | --------------- | - | ------- | -------- |  | - | --------- |  |  | ----------- | ------- |  | ------- | - | ------- | ------- |  | - | --------- |  |  | - | ---------- | - |  | - | ------- | 
|                       |  | Prior Cumulative |         |  | Cumulative      |   |         |          |  |   |           |  |  |             |         |  |         |  
|                       |  | Preferred Stock  |         |  | Preferred Stock |   |         | Common   |  |   | Paid-In   |  |  | Accumulated |         |  |         |  
|                       |  | Series A         |         |  | Series B        |   |         | Series A |  |   | Series B  |  |  | Stock       |         |  | Capital |   |         | Deficit |  |   | Total     | 
|BALANCE, JUNE 30, 2009 |  | $                | 500,000 |  |                 | $ | 500,000 |          |  | $ | 1,170,660 |  |  | $           | 190,780 |  |         | $ | 969,834 |         |  | $ | 3,134,722 |  |  | $ | (5,780,006 | ) |  | $ | 685,990 | 
|                       |  |                  |         |  |                 |   |         |         
|Net income             |  |                  | -       |  |                 |   | -       |          |  |   | -         |  |  |             | -       |  |         |   | -       |         |  |   | -         |  |  |   | 106,949    |   |  |   | 106,949 | 
|                       |  |                  |         |  |                 |   |         |          |  |   |           |  |  |             |         |  |         |   |         |         |  |   |           |  |  |   |            |   |  |   |         | 
|                       |  |                  |         |  |                 |   |         |         
|BALANCE, JUNE 30, 2010 |  | $                | 500,000 |  |                 | $ | 500,000 |          |  | $ | 1,170,660 |  |  | $           | 190,780 |  |         | $ | 969,834 |         |  | $ | 3,134,722 |  |  | $ | (5,673,057 | ) |  | $ | 792,939 | 
|                       |  |                  |         |  |                 |   |         |         
|Net income             |  |                  | -       |  |                 |   | -       |          |  |   | -         |  |  |             | -       |  |         |   | -       |         |  |   | -         |  |  |   | 9,347      |   |  |   | 9,347   | 
|                       |  |                  |         |  |                 |   |         |          |  |   |           |  |  |             |         |  |         |   |         |         |  |   |           |  |  |   |            |   |  |   |         | 
|                       |  |                  |         |  |                 |   |         |         
|BALANCE, JUNE 30, 2011 |  | $                | 500,000 |  |                 | $ | 500,000 |          |  | $ | 1,170,660 |  |  | $           | 190,780 |  |         | $ | 969,834 |         |  | $ | 3,134,722 |  |  | $ | (5,663,710 | ) |  | $ | 802,286 | 
|                       |  |                  |         |  |                 |   |         |          |  |   |           |  |  |             |         |  |         |   |         |         |  |   |           |  |  |   |            |   |  |   |         | 

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



22



---

##### Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended June 30, 2011 and 2010



|                                                                                  |  |      |            |   |      |   |            |  
|--------------------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | -
|                                                                                  |  | 2011 |            |   | 2010 |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                              |  |      |            |   |      |   |            |  
|Collections from customers                                                        |  | $    | 2,999,402  |   |      | $ | 3,006,936  |  
|Other income                                                                      |  |      | 1,299      |   |      |   | 925        |  
|Cost of sales, selling, general and administrative expenses paid                  |  |      | (2,957,426 | ) |      |   | (2,799,647 | )
|Interest paid                                                                     |  |      | (10,435    | ) |      |   | (3,871     | )
|Income taxes paid                                                                 |  |      | (197       | ) |      |   | (385       | )
|                                                                                  |  |      |            |   |      |   |            |  
|                                                                                  |  |     
|Net cash provided by operating activities                                         |  |      | 32,643     |   |      |   | 203,958    |  
|                                                                                  |  |      |            |   |      |   |            |  
|                                                                                  |  |     
|CASH FLOWS FROM INVESTING ACTIVITIES                                              |  |      |            |   |      |   |            |  
|Proceeds from sale of equipment                                                   |  |      | 500        |   |      |   | -          |  
|Purchases of property and equipment                                               |  |      | (33,488    | ) |      |   | (260,770   | )
|                                                                                  |  |      |            |   |      |   |            |  
|                                                                                  |  |     
|Net cash used in investing activities                                             |  |      | (32,988    | ) |      |   | (260,770   | )
|                                                                                  |  |      |            |   |      |   |            |  
|                                                                                  |  |     
|CASH FLOWS FROM FINANCING ACTIVITIES                                              |  |      |            |   |      |   |            |  
|Proceeds from line-of-credit                                                      |  |      | 40,000     |   |      |   | 210,000    |  
|Principal payments on line-of-credit                                              |  |      | (40,000    | ) |      |   | (210,000   | )
|Proceeds from equipment notes payable                                             |  |      | -          |   |      |   | 163,909    |  
|Principal payments on notes payable                                               |  |      | (87,391    | ) |      |   | (29,360    | )
|                                                                                  |  |      |            |   |      |   |            |  
|                                                                                  |  |     
|Net cash provided by (used in) financing activities                               |  |      | (87,391    | ) |      |   | 134,549    |  
|                                                                                  |  |      |            |   |      |   |            |  
|                                                                                  |  |     
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                              |  |      | (87,736    | ) |      |   | 77,737     |  
|                                                                                  |  |     
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                    |  |      | 106,508    |   |      |   | 28,771     |  
|                                                                                  |  |      |            |   |      |   |            |  
|                                                                                  |  |     
|CASH AND CASH EQUIVALENTS, END OF PERIOD                                          |  | $    | 18,772     |   |      | $ | 106,508    |  
|                                                                                  |  |      |            |   |      |   |            |  
|                                                                                  |  |     
|RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES         |  |      |            |   |      |   |            |  
|Net income                                                                        |  | $    | 9,347      |   |      | $ | 106,949    |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |      |            |   |      |   |            |  
|Depreciation and amortization                                                     |  |      | 119,398    |   |      |   | 75,344     |  
|Allowance for bad debts                                                           |  |      | 492        |   |      |   | (845       | )
|Deferred income amortization                                                      |  |      | (1,299     | ) |      |   | (1,299     | )
|Deferred income taxes                                                             |  |      | 5,294      |   |      |   | 70,665     |  
|(Gain) on sale of equipment                                                       |  |      | (500       | ) |      |   | 1,839      |  
|Effects of changes in operating assets and liabilities:                           |  |      |            |   |      |   |            |  
|Trade receivables                                                                 |  |      | 2,591      |   |      |   | 66,001     |  
|Inventories                                                                       |  |      | (140,525   | ) |      |   | (36,426    | )
|Prepaid expenses                                                                  |  |      | (88        | ) |      |   | 11,899     |  
|Accounts payable                                                                  |  |      | 36,062     |   |      |   | (89,836    | )
|Accrued expenses                                                                  |  |      | 1,873      |   |      |   | (150       | )
|Income taxes payable                                                              |  |      | (2         | ) |      |   | (183       | )
|                                                                                  |  |      |            |   |      |   |            |  
|                                                                                  |  |     
|NET CASH PROVIDED BY OPERATING ACTIVITIES                                         |  | $    | 32,643     |   |      | $ | 203,958    |  
|                                                                                  |  |      |            |   |      |   |            |  

The accompanying notes are an integral part of the

consolidated financial statements.



23



---

##### Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

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

Significant accounting policies are as follows:

PRINCIPLES OF CONSOLIDATION

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

SEGMENT REPORTING OF THE BUSINESS

The subsidiary, Dye Candy Company, operates two
divisions, Chase Candy Products and Seasonal Candy Products. Chase Candy Products involve production and sale of a candy bar marketed under the trade name Cherry Mash. The Seasonal Candy Products involve production and sale of coconut,
peanut, chocolate, and fudge confectioneries. The products of both divisions are sold to the same type of customers in the same geographical areas. In addition, both divisions share a common labor force and utilize the same basic equipment and raw
materials. Therefore, segment reporting for the two divisions is not maintained by Management and, accordingly, has not been disclosed in these consolidated financial statements.

USE OF ESTIMATES

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

CASH AND CASH EQUIVALENTS

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

REVENUE RECOGNITION

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



24



---

##### Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



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



SHIPPING AND HANDLING COSTS

Shipping and handling costs for freight expense on goods shipped is included in cost of sales. Freight expense on goods shipped for the years ended June 30, 2011 and 2010 was $141,955 and $135,109,
respectively.

RECEIVABLES

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

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

INVENTORIES

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

PROPERTY AND EQUIPMENT

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



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



25



---

##### Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



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



IMPAIRMENT OF LONG-LIVED ASSETS

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

INCOME TAXES

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

The Companys policy is to evaluate uncertain tax positions under the guidance as prescribed by ASC 740, Income Taxes. As of
June 30, 2011, the Company has not identified any uncertain tax positions requiring recognition in the consolidated financial statements.

EARNINGS PER SHARE

Basic Earnings Per
Common Share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted Earnings Per Common Share shall be computed by including contingently issuable shares
with the weighted average shares outstanding during the period. When inclusion of the contingently issuable shares would have an antidilutive effect upon earnings per share, diluted earnings per share will be calculated in the same manner as basic
earnings per share.

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



|                                                                             |  |      |         |  |      |  |         | 
|---------------------------------------------------------------------------- |  | ---- | ------- |  | ---- |  | ------- | 
|                                                                             |  | 2011 |         |  | 2010 | 
|Shares issuable upon conversion of Series A
Prior Cumulative Preferred Stock |  |      | 400,000 |  |      |  | 400,000 | 
|Shares issuable upon conversion of Series B
Prior Cumulative Preferred Stock |  |      | 375,000 |  |      |  | 375,000 | 
|Shares issuable upon conversion of Series A
Cumulative Preferred Stock       |  |      | 222,133 |  |      |  | 222,133 | 
|Shares issuable upon conversion of Series B
Cumulative Preferred Stock       |  |      | 36,201  |  |      |  | 36,201  | 



26



---

##### Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



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



ADVERTISING EXPENSE

Advertising is expensed when incurred. Advertising expense was $3,396 and $640 for the years ended June 30, 2011 and 2010, respectively.

IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS

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

In June 2009, the FASB issued new guidance on the consolidation of variable interest entities (VIE) in response to concerns about the
application of certain key provision of pre-existing guidance, including those regarding the transparency of the involvement with a VIE. Specifically, this new guidance requires a qualitative approach to identifying a controlling financial interest
in a VIE and requires ongoing assessment of whether an interest in a VIE makes the holder the primary beneficiary of the VIE and whether an entity is a VIE when a triggering event occurs. In addition, this new guidance requires additional
disclosures about the involvement with a VIE and any significant changes in risk exposure due to that involvement. This new guidance is effective for fiscal years beginning after November 15, 2009. The Company adopted the new guidance in the
first quarter of fiscal year 2011, which did not have a material impact on its condensed consolidated financial statements.



27



---

##### Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 2 - FORGIVABLE LOAN AND DEFERRED INCOME

During 2004, the Company received a $25,000 economic development incentive from Buchanan County, which is a five year forgivable loan at
a rate of $5,000 per year. The Nodaway Valley Bank established an Irrevocable Standby Letter of Credit in the amount of $25,000 as collateral for this loan, with a maturity date of January 3, 2010. The Company met the criteria of occupying a
20,000 square foot building and creating a minimum of two new full-time equivalent jobs during the first year of operation in the new facility. In addition, the Company maintained 19 existing jobs during the five year term. Notice was received
February 6, 2009 from the Buchanan County Commission, that the Company had fulfilled its minimum loan requirements so that the loan was forgiven in full and has no further obligations. Since the Company was no longer legally required to return
the monies, the liability was reclassified as deferred revenue and amortized into income over the life of the lease term of the new facility. At June 30, 2009, a total of $25,000 was reclassified to deferred revenue. Deferred revenue is
recognized on a straight line basis over the lease term of 20 years. During the years ended June 30, 2011 and 2010, deferred revenue of $1,299 was amortized into income for each period.

NOTE 3 - NOTES PAYABLE

The Companys long-term debt consists of:



|            |  |                                                                                                                                            |  |      |        |  |      |   |        | 
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------ |  | ---- | ------ |  | ---- | - | ------ | 
|Payee       |  | Terms                                                                                                                                      |  | 2011 |        |  | 2010 |  
|            |  |                                                                                                                                            | 
|Ford Credit |  | $1,001 monthly payments including interest of 0%; secured by a vehicle. Note was paid in full during the quarter ending December 31, 2010. |  | $    | -      |  |      | $ | 9,003  | 
|            |  |                                                                                                                                            | 
|Ford Credit |  | $573 monthly payments including interest of 6.99%; secured by a vehicle. Note was paid in full during quarter ending March 31, 2011.       |  |      | -      |  |      |   | 13,636 | 
|            |  |                                                                                                                                            | 
|Ford Credit |  | $679 monthly payments including interest of 0%; final payment due March 2016, secured by a vehicle.                                        |  |      | 38,713 |  |      |   | -      | 
|            |  |                                                                                                                                            | 
|Ford Credit |  | $517 monthly payment including interest of 0%; final payment due March 2016, secured by a vehicle.                                         |  |      | 29,450 |  |      |   | -      | 



28



---

##### Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 3 - NOTES PAYABLE(CONTINUED)



|                             |  |                                                                                                              |  |      |         |  |      |   |         | 
|---------------------------- |  | ------------------------------------------------------------------------------------------------------------ |  | ---- | ------- |  | ---- | - | ------- | 
|Payee                        |  | Terms                                                                                                        |  | 2011 |         |  | 2010 |  
|                             |  |                                                                                                              | 
|Honda                        |  | $508 monthly payments including interest of 1.9%; final payment due December 15, 2011, secured by a vehicle. |  |      | 3,030   |  |      |   | 9,007   | 
|                             |  |                                                                                                              | 
|Nissan                       |  | $557 monthly payments including interest of 3.9%; final payment due April 2012, secured by a vehicle.        |  |      | 5,425   |  |      |   | 11,740  | 
|                             |  |                                                                                                              | 
|Nodaway Valley Bank          |  | $3,192, including interest of 6.25%; final payment due June 2015, secured by equipment.                      |  |      | 115,036 |  |      |   | 163,909 | 
|                             |  |                                                                                                              |  |      |         |  |      |   |         | 
|                             |  |                                                                                                              | 
|                             |  | Total                                                                                                        |  |      | 191,654 |  |      |   | 207,295 | 
|                             |  | Less current portion                                                                                         |  |      | 54,844  |  |      |   | 56,820  | 
|                             |  |                                                                                                              |  |      |         |  |      |   |         | 
|                             |  | Long-term portion                                                                                            |  | $    | 136,810 |  |      | $ | 150,475 | 
|                             |  |                                                                                                              |  |      |         |  |      |   |         | 
|                             |  |                                                                                                             
|Future minimum payments are: |  |                                                                                                              |  |      |         |  |      |  
|                             |  |                                                                                                              | 
|                             |  | 2012                                                                                                         |  | $    | 54,844  |  |      |   |         | 
|                             |  | 2013                                                                                                         |  |      | 48,449  |  |      |   |         | 
|                             |  | 2014                                                                                                         |  |      | 50,643  |  |      |   |         | 
|                             |  | 2015                                                                                                         |  |      | 26,956  |  |      |   |         | 
|                             |  | 2016                                                                                                         |  |      | 10,762  |  |      |   |         | 
|                             |  |                                                                                                              |  |      |         |  |      |   |         | 
|                             |  |                                                                                                              | 
|                             |  | Total                                                                                                        |  | $    | 191,654 |  |      |   |         | 
|                             |  |                                                                                                              |  |      |         |  |      |   |         | 

NOTE 4 - NOTE PAYABLE - BANK

Effective January 1, 2010, the Company had a $250,000 line-of-credit agreement which expired on January 3, 2011. This line-of-credit agreement was renewed to extend until January 3, 2012,
with a variable interest rate at prime (5.0% at June 30, 2011 and 2010, respectively). The line-of-credit was collateralized by all the Companys assets. At June 30, 2011 and 2010, there were no outstanding balances on the
line-of-credit.



29



---

##### Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 5 - CAPITAL STOCK

Capital stock authorized, issued, and outstanding as of June 30, 2011 is as follows:



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

Cumulative Preferred Stock dividends in arrears at June 30, 2011 and 2010 totaled $7,308,446 and $7,180,374,
respectively. Total dividends in arrears, on a per share basis, consist of the following at June 30, 2011 and 2010:



|               |  |      |       |  |      |   |       | 
|-------------- |  | ---- | ----- |  | ---- | - | ----- | 
|               |  | 2011 |       |  | 2010 |  
|               |  |     
|6% Convertible |  |      |       |  |      |   |       | 
|Series A       |  | $    | 15.75 |  |      | $ | 15.45 | 
|Series B       |  |      | 15.30 |  |      |   | 15.00 | 
|               |  |     
|5% Convertible |  |      |       |  |      |   |       | 
|Series A       |  |      | 61.75 |  |      |   | 60.75 | 
|Series B       |  |      | 61.75 |  |      |   | 60.75 | 

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



30



---

##### Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 5 - CAPITAL STOCK(CONTINUED)



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

NOTE 6 - INCOME TAX

The recognition of income tax expense related to uncertain tax provisions is determined under the provisions of FASB ASC-740-10. The Company had no
unrecognized tax benefits as of the date of adoption. The income tax positions taken for open years are appropriately stated and supported for all open years. The Companys federal tax returns for the fiscal years ended 2009, 2010, and 2011 are
subject to examination by the IRS taxing authority.

As of June 30, 2009, the Company had a net operating loss carryforward of
approximately $4,512 of which the Companys June 30, 2010 profits were fully absorbed.

The sources of deferred tax assets and
liability at June 30, 2011 and 2010 are as follows:



|                           |  |      |          |   |      |   |          |  
|-------------------------- |  | ---- | -------- | - | ---- | - | -------- | -
|                           |  | 2011 |          |   | 2010 |  
|                           |  |     
|Deferred tax assets:       |  |      |          |   |      |   |          |  
|Inventories                |  | $    | 472      |   |      | $ | 174      |  
|Trade receivables          |  |      | 5,230    |   |      |   | 5,063    |  
|Contribution carryover     |  |      | 1,198    |   |      |   | 607      |  
|Deferred income            |  |      | 6,071    |   |      |   | 6,513    |  
|                           |  |      |          |   |      |   |          |  
|                           |  |     
|Total deferred tax assets  |  |      | 12,971   |   |      |   | 12,357   |  
|                           |  |     
|Deferred tax liability:    |  |      |          |   |      |   |          |  
|Property and equipment     |  |      | (106,290 | ) |      |   | (100,382 | )
|                           |  |      |          |   |      |   |          |  
|                           |  |     
|NET DEFERRED TAX LIABILITY |  | $    | (93,319  | ) |      | $ | (88,025  | )
|                           |  |      |          |   |      |   |          |  

The net deferred tax assets (liability) are presented in the accompanying June 30, 2011 and 2010 balance sheets as
follows:



|                                  |  |      |          |   |      |   |         |  
|--------------------------------- |  | ---- | -------- | - | ---- | - | ------- | -
|                                  |  | 2011 |          |   | 2010 |  
|                                  |  |     
|Current deferred tax asset        |  | $    | 6,900    |   |      | $ | 5,844   |  
|Noncurrent deferred tax liability |  |      | (100,219 | ) |      |   | (93,869 | )
|                                  |  |      |          |   |      |   |         |  
|                                  |  |     
|NET DEFERRED TAX LIABILITY        |  | $    | (93,319  | ) |      | $ | (88,025 | )
|                                  |  |      |          |   |      |   |         |  





31



---

##### Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 6 - INCOME TAX(CONTINUED)



The provision for income taxes, for the years ended June 30, 2011 and 2010, consists of the
following:



|                     |  |      |       |  |      |   |        | 
|-------------------- |  | ---- | ----- |  | ---- | - | ------ | 
|                     |  | 2011 |       |  | 2010 |  
|                     |  |     
|Current tax expense  |  | $    | 107   |  |      | $ | 202    | 
|Deferred tax expense |  |      | 5,294 |  |      |   | 70,665 | 
|                     |  |      |       |  |      |   |        | 
|                     |  |     
|                     |  | $    | 5,401 |  |      | $ | 70,867 | 
|                     |  |      |       |  |      |   |        | 

The income tax provision differs from the amount of income tax determined by applying the statutory federal income tax
rate to pretax income for the years ended June 30, 2011 and 2010 due to the following:



|                                                               |  |      |       |   |      |   |        | 
|-------------------------------------------------------------- |  | ---- | ----- | - | ---- | - | ------ | 
|                                                               |  | 2011 |       |   | 2010 |  
|                                                               |  |     
|Computed expected tax                                        |  | $    | 5,162 |   |      | $ | 62,236 | 
|Increase (decrease) in income taxes (benefits) resulting from: |  |      |       |   |      |   |        | 
|State income taxes, net of federal benefit                     |  |      | 603   |   |      |   | 5,960  | 
|Other                                                          |  |      | (364  | ) |      |   | 2,671  | 
|                                                               |  |      |       |   |      |   |        | 
|                                                               |  |     
|                                                               |  | $    | 5,401 |   |      | $ | 70,867 | 
|                                                               |  |      |       |   |      |   |        | 

The Company has unused contributions of $3,520 to carryforward that will expire for tax years ranging from 2015 through
2016.

NOTE 7 - INCOME (LOSS) PER SHARE

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



|                                                   |  |      |          |   |      |   |         |  
|-------------------------------------------------- |  | ---- | -------- | - | ---- | - | ------- | -
|                                                   |  | 2011 |          |   | 2010 |  
|                                                   |  |     
|Net income                                         |  | $    | 9,347    |   |      | $ | 106,949 |  
|                                                   |  |     
|Preferred dividend requirements:                   |  |      |          |   |      |   |         |  
|6% Prior Cumulative Preferred, $5 par value        |  |      | 60,000   |   |      |   | 60,000  |  
|5% Convertible Cumulative Preferred, $20 par value |  |      | 68,072   |   |      |   | 68,072  |  
|                                                   |  |      |          |   |      |   |         |  
|                                                   |  |     
|Total dividend requirements                        |  |      | 128,072  |   |      |   | 128,072 |  
|                                                   |  |      |          |   |      |   |         |  
|                                                   |  |     
|Net loss - common stockholders                     |  | $    | (118,725 | ) |      | $ | (21,123 | )
|                                                   |  |      |          |   |      |   |         |  



32



---

##### Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 7 - INCOME (LOSS) PER SHARE(CONTINUED)



|                                                |  |      |           |   |      |   |           |  
|----------------------------------------------- |  | ---- | --------- | - | ---- | - | --------- | -
|                                                |  | 2011 |           |   | 2010 |  
|                                                |  |     
|Weighted average of shares - Basic              |  |      | 969,834   |   |      |   | 969,834   |  
|                                                |  |      |           |   |      |   |           |  
|                                                |  |     
|Dilutive effect of contingently issuable shares |  |      | 1,033,334 |   |      |   | 1,033,334 |  
|                                                |  |      |           |   |      |   |           |  
|                                                |  |     
|Weighted Average Shares  Diluted               |  |      | 2,003,168 |   |      |   | 2,003,168 |  
|                                                |  |      |           |   |      |   |           |  
|                                                |  |     
|Basic earnings (loss) per share                 |  | $    | (0.12     | ) |      | $ | (0.02     | )
|                                                |  |      |           |   |      |   |           |  
|                                                |  |     
|Diluted earnings per share                      |  | $    | (0.12     | ) |      | $ | (0.02     | )
|                                                |  |      |           |   |      |   |           |  

NOTE 8 - SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION



|                            |  |      |        |  |      |   |       | 
|--------------------------- |  | ---- | ------ |  | ---- | - | ----- | 
|                            |  | 2011 |        |  | 2010 |  
|Cash paid for:              |  |      |        |  |      |   |       | 
|Interest                    |  | $    | 10,435 |  |      | $ | 3,871 | 
|Income taxes                |  |      | 197    |  |      |   | 385   | 
|Non-cash transaction:       |  |      |        |  |      |   |       | 
|Financing of new vehicles   |  |      | 71,750 |  |      |   | -     | 
|Value of vehicles traded-in |  |      | 26,063 |  |      |   | -     | 

NOTE 9 - COMMITMENTS

Dye Candy Company leases its office and manufacturing facility, located at 1307 South 59th, St. Joseph, Missouri, from an entity owned by the Vice-President and Director of the Company and his spouse. The
period of the lease is from February 1, 2005 through March 31, 2025, with an option to extend for an additional term of five years, and currently requires payments of $6,500 per month. At the end of the first five years, the base rent
shall be increased an amount not greater than 30%, at the sole discretion of lessor and for each additional term of five years. Rental expense was $78,000 for each year ended June 30, 2011 and 2010. The amounts are included in cost of sales.



33



---

##### Table of Contents

CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 9 - COMMITMENTS(CONTINUED)



Future minimum lease payments under this lease are as follows:

Year ending June 30:



|           |  |   |           | 
|---------- |  | - | --------- | 
|2012       |  | $ | 78,000    | 
|2013       |  |   | 78,000    | 
|2014       |  |   | 78,000    | 
|2015       |  |   | 78,000    | 
|2016       |  |   | 78,000    | 
|Thereafter |  |   | 682,500   | 
|           |  |   |           | 
|           |  | $ | 1,072,500 | 
|           |  |   |           | 

As of June 30, 2011, the Company had raw materials purchase commitments with three vendors totaling $410,000.

NOTE 10 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The Companys financial instruments consist principally of cash and cash equivalents, trade receivables and payables, and notes payable. There are no significant differences between the carrying
value and fair value of any of these consolidated financial instruments. As of June 30, 2011, the amount of the Companys long-term debt approximates fair value based on the present value of estimated future cash flows using a discount
rate commensurate with a borrowing rate available to the Company.

NOTE 11 - CONCENTRATION OF CREDIT RISK

For the years ending June 30, 2011 and 2010, two customers accounted for 43% and 39%, respectively, of the gross sales. For the year ending
June 30, 2011 and 2010, two customers accounted for 53% and four customers accounted for 77%, respectively, of accounts receivable.

NOTE 12 - RECLASSIFICATIONS

Certain
reclassifications of prior years amounts have been made to conform to the presentation adopted for 2011. These reclassifications had no effect on previously reported earnings or net equity.



34



---

##### Table of Contents

|Item 9 | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
|------ | ------------------------------------------------

| | ACCOUNTING AND FINANCIAL DISCLOSURE
| | -----------------------------------

Not applicable

Item 9A(T) CONTROLS AND PROCEDURES



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

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



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

The Companys management is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Management has
assessed the Companys internal control over financial reporting in relation to criteria described in Internal Control-Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). Based on this assessment using those criteria, management concluded that, as of June 30, 2011, the Companys internal control over financial reporting was effective.

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



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

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



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

None



35



---

##### Table of Contents

PART III



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



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



Name

Age


Periods of Service as Director

TermsBarry M. Yantis


66


1980 to present

One yearBrett A. Yantis


43


January 21, 1999 to present

One yearBrian A. Yantis


63


July 16, 1986 to present

One year


Executive Officers



Name

Age


Position

Years ofService asan 
Officer

TermBarry M. Yantis


66


President, CEO and Treasurer

32

Until successor electedBrett A. Yantis


43


Vice-President

9

Until successor electedBrian A. Yantis


63


Secretary

19

Until successor elected




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

There are no significant employees other than above.



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

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

Business Experience



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

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

Brian A. Yantis, secretary has been an officer of the Company since May 1992. Until retiring in 2011, he had been
associated with the insurance business for thirty-six years and was a vice-president of Aon Risk Services in Chicago, Illinois for twenty-two years.



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



36



---

##### Table of Contents

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

Not applicable



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

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



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

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



|Item 11 | EXECUTIVE COMPENSATION
|------- | ----------------------



| | (a) | General
| | --- | -------

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



| | (b) | 
| | --- | 



Summary Compensation TableLong Term CompensationAnnual Compensation


Awards

PayoutsName and
Principal Position

FiscalYear End

Salary


Bonus


OtherAnnualCompensation



RestrictedStockAward (s)

Option/SARs (#)

LTIPPayouts

All otherCompensationBarry M. Yantis

1) 06-30-11

$
132,000


$
1,000


$
2,340


-

-

-

-Barry M. Yantis

1) 06-30-10

$
132,000


$
-


$
3,700


-

-

-

-Barry M. Yantis

1) 06-30-09

$
127,902


$
-


$
2,635


-

-

-

-




| | 1) | CEO, President and Treasurer
| | -- | ----------------------------



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



| | 3) | No other officers have compensation over $100,000 for their services besides those listed in this compensation table.
| | -- | ---------------------------------------------------------------------------------------------------------------------



| | (c) | Option/SAR grants table
| | --- | -----------------------

Not applicable



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

Not applicable



| | (e) | Long-term incentive plan awards table
| | --- | -------------------------------------

Not applicable



37



---

##### Table of Contents

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





| | (f) | Compensation of Directors
| | --- | -------------------------

Directors are not compensated for services on the board. The directors are reimbursed for travel expenses incurred in attending board meetings. During the fiscal year 2011 and 2010, $273 and $-0-,
respectively, of travel expenses were reimbursed to board member Brian A. Yantis.



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

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



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

Not applicable



| | (i) | Additional information with respect to compensation committee interlocks and insider participation in compensation decisions
| | --- | ----------------------------------------------------------------------------------------------------------------------------

The registrant has no formal compensation committee. The Board of Directors, Brian A. Yantis, Barry M. Yantis, and Brett A. Yantis (all
current officers of the Company) annually approve the compensation of Barry M. Yantis, CEO, President and Treasurer.



| | (j) | Board compensation committee report on executive compensation
| | --- | -------------------------------------------------------------

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



38



---

##### Table of Contents

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



|    |  |                                                                    |  |                                  |  |                                        |         |     |            |           
|--- |  | ------------------------------------------------------------------ |  | -------------------------------- |  | -------------------------------------- | ------- | --- | ---------- | ----------
|    |  | Title of Class                                                     |  | Name and Address                 |  | AmountsandNatureofBeneficial
Ownership |         |     | % of Class
|(a) |  | Security ownership of certain beneficial owners                    |  |                                  |  |                                        |         |     |            |           
|    |  |                                                                    |  |                                 
|    |  | Common; par value $1 per share                                     |  | Barry Yantis, CEO & Director     |  |                                        | 194,385 | (1) |            | 16.9%  (2)
|    |  |                                                                    |  | 5605 Osage Drive                 |  |                                        |         |     |            |           
|    |  |                                                                    |  | St. Joseph, Mo.                  |  |                                        |         |     |            |           
|    |  |                                                                    |  | 64503                            |  |                                        |         |     |            |           
|    |  |                                                                    |  |                                 
|    |  |                                                                    |  | Brian Yantis, Officer & Director |  |                                        | 97,192  | (1) |            | 8.4%  (2) 
|    |  |                                                                    |  | 1210 E. Clarendon                |  |                                        |         |     |            |           
|    |  |                                                                    |  | Arlington Heights, IL.           |  |                                        |         |     |            |           
|    |  |                                                                    |  | 60004                            |  |                                        |         |     |            |           
|    |  |                                                                    |  |                                 
|(b) |  | Security ownership of management                                   |  |                                  |  |                                        |         |     |            |           
|    |  |                                                                    |  |                                 
|    |  | Common; par value $1 per share                                     |  | Two directors and CEO as a group |  |                                        | 110,856 |     |            | 11.4%     
|    |  |                                                                    |  |                                 
|    |  | Prior Cumulative Preferred, $5 par value: Series A, 6% convertible |  | Two directors and CEO as a group |  |                                        | 21,533  |     |            | 21.5%     
|    |  |                                                                    |  |                                 
|    |  | Prior Cumulative Preferred $5 par value: Series B, 6% convertible  |  | Two directors and CEO as a group |  |                                        | 21,533  |     |            | 21.5%     
|    |  |                                                                    |  |                                 
|    |  | Cumulative Preferred, $20 par value: Series A, $5 convertible      |  | Two directors and CEO as a group |  |                                        | 3,017   |     |            | 5.2%      
|    |  |                                                                    |  |                                 
|    |  | Cumulative Preferred, $20 par value: Series B, $5 convertible      |  | Two directors and CEO as a group |  |                                        | 630     |     |            | 6.6%      



| | (1) | Includes 120,477 and 60,244 shares, respectively, which could be received within 30 days upon conversion of preferred stock.
| | --- | ----------------------------------------------------------------------------------------------------------------------------



| | (2) | Reflects the percentage assuming the preferred shares above were converted into common stock.
| | --- | ---------------------------------------------------------------------------------------------

(c)     No known change of control is anticipated.



39



---

##### Table of Contents

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



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

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



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

Not applicable



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

Not applicable



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

Not applicable



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

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



|                          |  |      |        |  |      |   |        | 
|------------------------- |  | ---- | ------ |  | ---- | - | ------ | 
|                          |  | 2010 |        |  | 2009 |  
|Audit fees:               |  |      |        |  |      |   |        | 
|Mayer Hoffman McCann P.C. |  | $    | 52,587 |  |      | $ | 56,745 | 
|Tax fees                  |  |      | -      |  |      |   | -      | 
|All other fees            |  |      | -      |  |      |   | -      | 



40



---

##### Table of Contents

PART IV



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

The following documents are filed as part of this report.



|   |  |                                                 |  |      |         | 
|-- |  | ----------------------------------------------- |  | ---- | ------- | 
|1. |  | Financial Statements:                           |  | Page |        
|   |  |                                                
|   |  | Index to Financial Statements                   |  |      | 17      | 
|   |  |                                                
|   |  | Consolidated Balance Sheets                     |  |      | 19 - 20 | 
|   |  |                                                
|   |  | Consolidated Statements of Operations           |  |      | 21      | 
|   |  |                                                
|   |  | Consolidated Statements of Stockholders Equity |  |      | 22      | 
|   |  |                                                
|   |  | Consolidated Statements of Cash Flows           |  |      | 23      | 
|   |  |                                                
|   |  | Notes to Consolidated Financial Statements      |  |      | 24 - 34 | 



| | 2. | Financial Statements Schedules:
| | -- | -------------------------------

None



| | 3. | Exhibits:
| | -- | ---------

The exhibits listed
below are filed with or incorporated by reference in this report.

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

3.1 Articles of Incorporation of Chase
General Corporation

3.2 Bylaws

The following are Exhibits attached or explanations included in Notes to Financial Statements in Part II of this report:



| | 4. | Instruments defining the rights of security holders including indentures - Refer to Note 5.
| | -- | -------------------------------------------------------------------------------------------

| | 11. | Computation of per share earnings - Refer to Note 7.
| | --- | ----------------------------------------------------

| | 14. | Code of Ethics
| | --- | --------------

| | 21. | Subsidiaries of registrant - Refer to Note 1 of Notes to Financial Statements.
| | --- | ------------------------------------------------------------------------------

| | 31.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a)/15d  14(a) of the Securities Exchange Act of 1934, as amended, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 32.1 | Certification of Chairman of the Board, Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



41



---

##### Table of Contents

SIGNATURES

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



|                         |  |     |  |                                                
|------------------------ |  | --- |  | -----------------------------------------------
|                         |  |     |  | CHASE GENERAL CORPORATION
(Registrant)         
|                         |  |    
|Date: September 22, 2011 |  | By: |  | /s/    Barry
M. Yantis                         
|                         |  |     |  | Barry M. Yantis                                
|                         |  |     |  | Chairman of the Board, Chief Executive Officer,
|                         |  |     |  | President and Treasurer                        

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



|                                       |  |                                                                                                               |  |                   
|-------------------------------------- |  | ------------------------------------------------------------------------------------------------------------- |  | ------------------
|Signatures                             |  | Title                                                                                                         |  | Date              
|                                       |  |                                                                                                              
|/s/    Barry M. Yantis
Barry M. Yantis |  | Chairman of the Board, Chief Executive Officer and Chief Financial Officer, President, Treasurer and Director |  | September 22, 2011
|                                       |  |                                                                                                              
|/s/    Brett Yantis
Brett Yantis       |  | Vice-President and Director                                                                                   |  | September 22, 2011
|                                       |  |                                                                                                              
|/s/    Brian A. Yantis
Brian A. Yantis |  | Secretary and Director                                                                                        |  | September 22, 2011



42