<PAGE>

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

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


For the fiscal year ended June 30, 2001

Commission File Number 2-5916

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

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

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

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

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

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

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

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

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

Indicate the number of shares outstanding of each of the registrants' classes of
common stock as of the latest practicable date:  969,834 (one class with $1 par
value) as of September 5, 2001.

Location in this filing where exhibit index is located:  32
                                                         --

Total number of pages included in this filing:   39
                                                 --


                                       1
<PAGE>

                                    PART I

ITEM 1    BUSINESS
          --------

          (a)  General development of business
               -------------------------------

               (1)  Narrative history of business
                    -----------------------------

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

               (2)  Not applicable.

          (b)  Financial information about industry segments
               ---------------------------------------------

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

          (c)  Narrative description of businesses
               -----------------------------------

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

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



                                  (Continued)

                                       2
<PAGE>

ITEM 1    BUSINESS (CONTINUED)
          --------

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

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

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

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

                         The bars are sold primarily to wholesale candy and
                         tobacco jobbing houses, grocery accounts, and vendors.
                         "Cherry Mash" bars are marketed in the Midwest region
                         of the United States. For the years ended June 30,
                         2001, 2000, and 1999, this division accounted for 57%,
                         61%, and 56%, respectively, of the consolidated revenue
                         of Dye Candy Company.

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

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


                         The Poe line is sold primarily on a Midwest regional
                         basis to national syndicate accounts, repackers, and
                         grocery accounts. For the years ended June 30, 2001,
                         2000, and 1999, this division accounted for 43%, 39%,
                         and 44%, respectively, of the consolidated revenue of
                         Dye Candy Company. The Company discontinued the coconut
                         cubes during the year ended June 30, 2000.

                    (ii)  Not applicable.

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



                                  (Continued)

                                       3
<PAGE>

ITEM 1  BUSINESS (CONTINUED)
        --------

                    (iv)    The largest single revenue producing product, the
                            "Cherry Mash" bar, is protected by a trademark
                            registered with the United States Government Patents
                            Office. Management considers this trademark very
                            important to the Company. The trademark was renewed
                            during the fiscal year ended June 30, 1985. This
                            trademark expires in the year 2002. Management and
                            its legal representatives do not expect any
                            impediment to renewing this trademark prior to its
                            expiration.

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

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

                    (vii)   For the years ending June 30, 2001, 2000, and 1999,
                            Associated Wholesale Grocers, accounted for 25.64%,
                            20.01% and 19.64% of gross sales, respectively. For
                            the years ending June 30, 2001, 2000, and 1999, Wal-
                            Mart and its affiliates accounted for 28.54%, 20.08%
                            and 12.06% of gross sales, respectively. The loss of
                            Associated Wholesale Grocers would not have an
                            adverse effect on the Company as the customer
                            purchases and distributes to retail outlets and
                            these outlets would continue to demand products
                            offered by Dye Candy Company. However, due to the
                            affiliation certain outlets have with Wal-Mart, a
                            loss of this customer would reduce gross sales. The
                            Company continues to seek additional markets for its
                            products.

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

                    (ix)    Not applicable.



                                  (Continued)

                                       4
<PAGE>

ITEM 1  BUSINESS (CONTINUED)
        --------

                    (x)     The confectionery market for the type of product
                            produced by the divisions of Dye Candy Company is
                            very competitive and quality minded. The
                            confectionery (candy) industry in which the
                            divisions operate is highly competitive with many
                            small companies and, within certain specialized
                            areas, a few competitors dominate. In the United
                            States, the dominant competitors in the coconut
                            candy industry are Bradley Candy Company, Crown
                            Candy Company, Vermico Candy Company, and the Poe
                            Division of Dye Candy Company with approximately 70%
                            of the market share among them. In the United
                            States, Sophie Mae and Old Dominion have
                            approximately 80% of the market share of the peanut
                            candy business in which the Poe Division operates.
                            Dye Candy Company sells approximately 90% of its
                            products in the Midwest region with seasonal orders
                            being shipped to the Southern and Eastern regions of
                            the United States. Except for the coconut candy
                            industry, Dye Candy Company is not a dominant
                            competitor in any of the candy industries in which
                            it competes. Dye Candy Company's Shares in the
                            coconut industry approximates 15% to 20% annually.
                            This does not vary significantly from year to year.
                            Principal methods of competition the Company uses
                            include quality of product, price, reduced
                            transportation costs due to central location, and
                            service. The Company's competitive position is
                            positively influenced by labor costs being lower
                            than industry average. Chase General Corporation is
                            firmly established in the confectionery market and
                            through its operating divisions has many years'
                            experience associated with its name.

                    (xi)    Not applicable.

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

                    (xiii)  The Company employs approximately 25 full time
                            personnel year round. This expands to approximately
                            50 full time personnel during the two busy
                            production seasons in spring and fall.

          (d)  Foreign and domestic operations and export sales
               ------------------------------------------------

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



                                       5
<PAGE>

ITEM 2    PROPERTIES
          ----------

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

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

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

ITEM 3    LEGAL PROCEEDINGS
          -----------------

          The Company is not, and has not been, a party in any material pending
          legal proceedings, other than ordinary litigation incidental to its
          business, during the fiscal year ended June 30, 2001, nor are any such
          proceedings contemplated.

ITEM 4    RESULTS OF VOTES OF SECURITY HOLDERS
          ------------------------------------

          No matters were submitted to a vote of security holders of the
          registrant during the fourth quarter of the fiscal year ended June 30,
          2001.

                                       6
<PAGE>

                                    PART II

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

          (a)  Market information
               ------------------

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

          (b)  Approximate number of security holders
               --------------------------------------

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

          (c)  Dividends
               ---------

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

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

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

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

ITEM 6    SELECTED FINANCIAL DATA
          -----------------------

          (a)  Last five years
               ---------------
<TABLE>
<CAPTION>
                                                     06-30-2001      06-30-2000     06-30-99     06-30-98     06-30-97
                                                     ----------      ----------     --------     --------     --------
          <S>                                        <C>             <C>            <C>          <C>          <C>
          (i)    Net sales or operating revenue      $ 1,981,030     $ 2,129,785   $2,134,920   $2,113,777   $2,317,501

          (ii)   Income (loss) from continuing
                    operations                       $   (27,191)    $    42,284   $   49,262   $  (33,502)  $   50,174

          (iii)  Income (loss) from continuing
                    operations per common share *    $      (.16)    $      (.09)  $     (.09)  $     (.17)  $     (.08)

          (iv)   Total assets                        $   714,901     $   800,691   $  798,961   $  770,998   $  837,871

          (v)    Long-term debt                      $    77,672     $   127,672   $  162,672   $  185,305   $  207,659

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

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

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

                                       7
<PAGE>

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

          (a & b)   Liquidity and capital resources
                    -------------------------------

          Positive cash flows from operating activities were generated for
          fiscal years ended June 30, 2001, 2000, and 1999 in the amounts of
          $74,261, $28,797, and $99,294, respectively.

          At various times during the years, and in anticipation of heavier cash
          demands due to seasonal production, plant improvements, and/or major
          promotional programs, it is the Company's practice to invest in short
          term U.S. Treasury obligations or financial institution certificates
          of deposit. At June 30, 2001, 2000, and 1999 the Company had $50,000,
          $100,000, and $150,000, respectively invested in short term
          certificates of deposit to meet the 2001, 2000, and 1999 fall
          production season.

          The Company continually monitors raw material pricing, and when a
          price increase/decrease is anticipated adjustments to inventory levels
          are made accordingly. Raw materials increased approximately $27,000
          from June 30, 2000 to June 30, 2001. Raw materials at June 30, 2000
          were comparable to prior year. Purchase commitments at June 30, 2001
          were approximately $286,000 lower than at June 30, 2000. The decrease
          was due to the Company evaluating pricing and the market and having an
          adequate raw materials supply for current production. Purchase
          commitments at June 30, 2000 were approximately $125,000 higher than
          at June 30, 1999. This increase was due to $26,000 in peanut contracts
          over prior year and approximately $102,000 additional purchase
          commitments of chocolate over prior year. The Company's contracts for
          these products has been fulfilled and new contracts established. The
          Company watches markets for these commodities and purchases are made
          accordingly.

          Packaging materials are purchased in large volumes and carried for
          several years due to the high cost from suppliers to cut dies and
          print materials. Therefore, when supplier pricing remains consistent
          over the years and is not predicted to increase, the Company utilizes
          its present inventory supply without making additional purchases
          necessary to lock in pricing. Packaging inventory decreased
          approximately $59,000 from June 30, 2000 to June 30, 2001. The
          decrease was due to the higher than normal purchase in 2000. Packaging
          materials inventory increased $35,000 from June 30, 1999 to June 30,
          2000. These inventory items were purchased during the year ending June
          30, 2000 to replenish inventory used in the current and prior years
          production. These items were purchased in quantities large enough to
          fulfill the Company's packaging needs for several seasons.

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

          Finished goods inventory did not significantly change from June 30,
          1999 to June 30, 2000. The slight increase as due to timing of
          customer purchases of the Cherry Mash products. Goods in process
          remained comparable to prior years.

                                  (Continued)

                                       8
<PAGE>

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

          The Company continues to write off equipment that is no longer useful
          to the operations of the Company. These write offs have been
          immaterial over the past three years. The Company also continues to
          replace old equipment on a yearly basis in order to streamline
          operations. However, due to cash flow needs in other areas, the
          Company has not been able to update the equipment at any significant
          level. During the year ending June 30, 1999, $16,041 was spent to
          upgrade production equipment. Also, during 1999, $15,104 was used to
          add to transportation and office equipment. Expenditures of $13,574
          were made to upgrade existing production equipment, in addition,
          $40,053 was made to update transportation and office equipment during
          the year ending June 30, 2000. Expenditures of $53,626 were made to
          upgrade and replace transportation and office equipment during the
          year-end June 30, 2001. Depending on results of operations and cash
          flows, the Company is hoping to replace their antiquated brittle
          cookers in the next several years with no set target date.

          For the past nine years, the Company has not been indebted except for
          the series B notes. Of the original $630,000 Series B notes payable,
          $127,672 remain outstanding at June 30, 2000. On December 20, 1995,
          the Company received approval to extend the notes to December 20, 2002
          at the current 6% rate of interest, with the agreement that this was
          the final note extension. Of the outstanding amount at June 30, 2001,
          $77,672 is classified long-term and $-0- is classified as current.
          Realizing that the minimum yearly principal payment required by the
          note indenture will not satisfy the notes on December 20, 2002, the
          Company has accelerated the principal payments on the notes during the
          past four fiscal years. It is anticipated that acceleration of
          principal payments will continue as cash flow has been adequate for
          operations and equipment replacement.

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

          The Company realized success in 1999, and for the year ending June 30,
          1999 net sales increased by 1% and the cost of sales decreased by 1%
          from the prior year. Operating expenses were closely monitored during
          1999 and decreased by 13% for the year. This was accomplished by
          decreasing selling expenses by 12%, and general and administrative by
          15%. During the year ending June 30, 2000, net sales and the cost of
          sales remained comparable to prior year.

                                  (Continued)

                                       9
<PAGE>

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

          Operating expenses increased by 2.9% from June 30, 1999 through June
          30, 2000. This increase was due to increased general and
          administration expenses. While most general and administration
          expenses remained constant, insurance expense increased by $9,981 and
          bad debt expense increased by $24,615. Insurance increased as rates
          for general and liability insurance continue to go up. During the year
          ending June 30, 2000 the Company had several large customer accounts
          which had to be written off. Of the current year write off of $20,813,
          $9,240 was from one customer that purchased product and immediately
          declared bankruptcy. During the year ending June 30, 1999 the Company
          netted $4,012 more from collections of prior write-off than were
          ultimately written off. The Company continues a very aggressive
          collection effort. The aging of accounts receivable is reviewed on a
          regular basis and accounts which become overdue are pursued for
          collection.

          Selling expenses decreased by $28,381 during the year ending June 30,
          2000. This was due to the Company change in policy on brokers fees or
          commissions to customers. The Company discontinued allowing these fees
          as a reduction of selling price.

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

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

          Under the leadership of the CEO and his sales staff, the Company has
          stabilized its customer base. Certainly some customers were lost
          during 2001, but the Company is working to replace those customers.
          The Company continues to look for new markets but only when the
          addition of a new market is profitable.

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

                                  (Continued)

                                      10
<PAGE>

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

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

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

ITEM 7A   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
          ----------------------------------------------------------

          Not applicable. Refer to Note 7, "Notes to Financial Statements" for
          fair value of financial instruments as of June 30, 2001.

ITEM 8    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
          -------------------------------------------

          Financial statements meeting the requirements of Regulation S-X are
          contained on pages 13 through 26 of the filing.

          (a)  Selected quarterly financial data
               ---------------------------------

               Exempt from requirements per second major condition for smaller
               companies.


          (b)  Information about oil and gas producing activities
               --------------------------------------------------

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

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

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

                                       11
<PAGE>

                         INDEPENDENT AUDITOR'S REPORT

Board of Directors
Chase General Corporation
St. Joseph, Missouri

We have audited the accompanying consolidated balance sheets of Chase General
Corporation and subsidiary as of June 30, 2001 and 2000 and the related
consolidated statements of operations, stockholders' equity, and cash flows for
each of the years in the three-year period ended June 30, 2001. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Chase
General Corporation and subsidiary as of June 30, 2001 and 2000, and the results
of their operations and their cash flows for each of the years in the three-year
period ended June 30, 2001, in conformity with accounting principles generally
accepted in the United States of America.

                                                 /s/ Clifton Gunderson LLP

Clifton Gunderson LLP
St. Joseph, Missouri
September 5, 2001

                                      12
<PAGE>

                   CHASE GENERAL CORPORATION AND SUBSIDIARY
                          CONSOLIDATED BALANCE SHEETS
                            June 30, 2001 and 2000

                                    ASSETS
<TABLE>
<CAPTION>
                                                            2001         2000
                                                         ----------   ----------
<S>                                                      <C>          <C>
CURRENT ASSETS
   Cash and cash equivalents                             $  117,114   $  146,779
   Receivables:
      Trade, less allowance for doubtful
      accounts of $10,669 in 2001 and $11,393 in 2000       100,494      129,018
      Other receivables                                          --        3,239
      Income tax receivables                                  7,053           --
   Inventories:
      Finished goods                                         73,138       85,147
      Goods in process                                        1,943        4,872
      Raw materials                                          80,592       53,232
      Packaging materials                                    64,536      123,938
   Prepaid expense                                           34,606       34,960
   Prepaid income taxes                                      11,220        1,158
                                                         ----------   ----------

         Total current assets                               490,696      582,343
                                                         ----------   ----------

PROPERTY AND EQUIPMENT
   Land                                                      35,000       35,000
   Buildings                                                 85,738       85,738
   Machinery and equipment                                  677,358      676,914
   Trucks and autos                                         148,527      104,513
   Office equipment                                          49,660       49,123
   Leasehold improvements                                   121,356      121,356
                                                         ----------   ----------
      Total, at cost                                      1,117,639    1,072,644
   Less accumulated depreciation                            893,434      854,296
                                                         ----------   ----------

         Total property and equipment                       224,205      218,348
                                                         ----------   ----------

TOTAL ASSETS                                             $  714,901   $  800,691
                                                         ==========   ==========
</TABLE>


                                       13
<PAGE>

                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                2001          2000
                                                             -----------   -----------
<S>                                                          <C>           <C>
CURRENT LIABILITIES
  Accounts payable                                           $    46,002   $    54,718
  Notes payable, Series B, current maturities                         --         4,321
  Accrued expense:
     Interest                                                      6,161         8,711
     Other                                                        29,140        26,473
                                                             -----------   -----------

       Total current liabilities                                  81,303        94,223

LONG-TERM LIABILITIES
  Notes payable, Series B, less current maturities above          77,672       123,351
                                                             -----------   -----------

       Total liabilities                                         158,975       217,574
                                                             -----------   -----------

STOCKHOLDERS' EQUITY
  Capital stock issued and outstanding:
     Prior cumulative preferred stock, $5 par value:
       Series A (liquidation preference $1,275,000 and
          $1,245,000 respectively)                               500,000       500,000
       Series B (liquidation preference $1,230,000 and
          $1,200,000 respectively)                               500,000       500,000
     Cumulative preferred stock, $20 par value:
       Series A (liquidation preference $3,029,083 and
          $2,970,550 respectively)                             1,170,660     1,170,660
       Series B (liquidation preference $493,643 and
          $484,104 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                                         (5,910,070)   (5,882,879)
                                                             -----------   -----------

       Total stockholders' equity                                555,926       583,117
                                                             -----------   -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                   $   714,901   $   800,691
                                                             ===========   ===========
</TABLE>

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

                                       14
<PAGE>

                   CHASE GENERAL CORPORATION AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                   Years Ended June 30, 2001, 2000, and 1999

<TABLE>
<CAPTION>
                                                  2001            2000             1999
                                               ----------      ----------       ----------
<S>                                            <C>             <C>              <C>
NET SALES                                      $1,981,030      $2,129,785       $2,134,920

COST OF SALES                                   1,587,058       1,665,882        1,677,258
                                               ----------      ----------       ----------

   Gross Profit                                   393,972         463,903          457,662
                                               ----------      ----------       ----------

OPERATING EXPENSES
   Selling expenses                               232,750         218,211          246,592
   General and administrative expenses            197,650         188,660          148,838
                                               ----------      ----------       ----------

      Total operating expenses                    430,400         406,871          395,430
                                               ----------      ----------       ----------

      Income (loss) from operations               (36,428)         57,032           62,232
                                               ----------      ----------       ----------

OTHER INCOME (EXPENSE)
   Interest income                                  6,922           6,323            6,498
   Miscellaneous income                             1,690             347            1,758
   Interest expense                                (6,160)         (8,842)         (10,571)
   Other expense                                       --            (173)              --
                                               ----------      ----------       ----------

      Total other income (expense)                  2,452          (2,345)          (2,315)
                                               ----------      ----------       ----------

         Income (loss) before income taxes        (33,976)         54,687           59,917

PROVISION FOR INCOME TAXES                         (6,785)         12,403           10,655
                                               ----------      ----------       ----------

NET INCOME (LOSS)                              $  (27,191)     $   42,284       $   49,262
                                               ==========      ==========       ==========

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

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

                                       15

<PAGE>

                   CHASE GENERAL CORPORATION AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                   Years Ended June 30, 2001, 2000, and 1999
<TABLE>
<CAPTION>


                                     Prior Cumulative        Cumulative
                                     Preferred Stock      Preferred Stock
                                    ------------------  --------------------    Common     Paid-in     Accumulated
                                    Series A  Series B   Series A   Series B    Stock      Capital       Deficit       Total
                                    --------  --------  ----------  --------   --------   ----------   -----------    --------
<S>                                 <C>       <C>       <C>         <C>        <C>        <C>          <C>            <C>

BALANCE (DEFICIT), JUNE 30, 1998    $500,000  $500,000  $1,170,660  $190,780   $969,834   $3,134,722   $(5,974,425)   $491,571

   Net income                             --        --          --        --         --           --        49,262      49,262
                                    --------  --------  ----------  --------   --------   ----------   -----------    --------

BALANCE (DEFICIT), JULY 1, 1999      500,000   500,000   1,170,660   190,780    969,834    3,134,722    (5,925,163)    540,833

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

BALANCE (DEFICIT), JUNE 30, 2000     500,000   500,000   1,170,660   190,780    969,834    3,134,722    (5,882,879)    583,117

   Net loss                               --        --          --        --         --           --       (27,191)    (27,191)
                                    --------  --------  ----------  --------   --------   ----------   -----------    --------
BALANCE (DEFICIT), JUNE 30, 2001    $500,000  $500,000  $1,170,660  $190,780   $969,834   $3,134,722   $(5,910,070)   $555,926
                                    ========  ========  ==========  ========   ========   ==========   ===========    ========
</TABLE>

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

                                      16
<PAGE>

                   CHASE GENERAL CORPORATION AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                   Years Ended June 30, 2001, 2000, and 1999

<TABLE>
<CAPTION>
                                                        2001              2000             1999
                                                     -----------       -----------      -----------
<S>                                                  <C>               <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES

   Collections from customers                        $ 2,010,278       $ 2,119,123      $ 2,094,487
   Interest received                                       6,922             6,323            6,498
   Other income                                            1,689             1,182            2,042
   Income tax refunds                                         --                --           24,710
   Cost of sales, selling, general and
      administrative expenses paid                    (1,924,698)       (2,075,152)      (2,015,534)
   Interest paid                                          (8,710)          (10,571)         (12,109)
   Income tax paid                                       (11,220)          (12,108)            (800)
                                                     -----------       -----------      -----------

      Net cash provided by operating activities           74,261            28,797           99,294
                                                     -----------       -----------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES

   Purchases of property and equipment                   (53,626)          (53,627)         (31,145)
                                                     -----------       -----------      -----------

      Net cash used in investing activities              (53,626)          (53,627)         (31,145)
                                                     -----------       -----------      -----------

CASH FLOWS FROM FINANCING ACTIVITIES

   Principal payments on notes payable, Series B         (50,000)          (35,000)         (22,633)
                                                     -----------       -----------      -----------

      Net cash used in financing activities              (50,000)          (35,000)         (22,633)
                                                     -----------       -----------      -----------

NET INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS                                  (29,365)          (59,830)          45,516

CASH AND CASH EQUIVALENTS,
   BEGINNING OF YEAR                                     146,779           206,609          161,093
                                                     -----------       -----------      -----------

CASH AND CASH EQUIVALENTS, END OF YEAR               $   117,414       $   146,779      $   206,609
                                                     ===========       ===========      ===========
</TABLE>

                                       17
<PAGE>

<TABLE>
<CAPTION>
                                                                    2001          2000           1999
                                                                  --------      --------       --------
<S>                                                               <C>           <C>            <C>
RECONCILIATION OF NET INCOME TO NET
  CASH PROVIDED BY OPERATING ACTIVITIES

  Net income (loss)                                               $(27,191)     $  42,284      $ 49,262

  Adjustments to reconcile net income (loss) to net
      cash provided by operating activities:
      Depreciation                                                  48,069         52,211        55,813
      Loss on disposal of equipment                                     --            835           284
      Provision for doubtful accounts                                2,225         20,603        (4,012)
      Effects of changes in operating assets and liabilities:
         Trade receivable                                           26,299        (10,662)      (40,433)
         Other receivable                                            3,239         (3,239)           --
         Income tax receivable                                      (7,054)            --        24,710
         Inventories                                                46,980        (67,032)       11,256
         Prepaid expense                                               354            509            80
         Prepaid income taxes                                      (10,063)        (1,158)        1,000
         Accounts payable                                           (8,716)         6,335       (10,811)
         Income taxes payable                                           --         (8,855)        8,855
         Accrued liabilities                                           119         (3,034)        3,290
                                                                  --------       --------      --------

NET CASH PROVIDED BY
  OPERATING ACTIVITIES                                            $ 74,261       $ 28,797      $ 99,294
                                                                  ========       ========      ========
</TABLE>

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

                                      18
<PAGE>

                   CHASE GENERAL CORPORATION AND SUBSIDIARY
                  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Chase General Corporation was incorporated on November 6, 1944 in the State of
Missouri for the purpose of manufacturing confectionery products. The Company
grants credit terms to substantially all customers, consisting of repackers,
grocery accounts, and national syndicate accounts, who are primarily located in
the Midwest region of the United States. The Company's fiscal year ends June 30.
Significant accounting policies followed by the Company are presented below:

PRINCIPLES OF CONSOLIDATION

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

SEGMENT REPORTING OF THE BUSINESS

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

USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS

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

CASH AND CASH EQUIVALENTS

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

                                      19
<PAGE>

                   CHASE GENERAL CORPORATION AND SUBSIDIARY
                  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INVENTORIES

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


PROPERTY AND EQUIPMENT

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

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


INCOME TAXES

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

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

                                      20
<PAGE>

               CHASE GENERAL CORPORATION AND SUBSIDIARY NOTES TO
                       CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - NOTES PAYABLE, SERIES B

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

Pursuant to a supplemental indenture, dated April 1, 1968 and executed in
compliance with a request by Yantis & Co. in furtherance of the winding-up of
its affairs, the original notes aggregating $680,000 were reissued in two series
designated as A and B, respectively. The Series A notes aggregating $50,000 had
priority and were retired during the year ended June 30, 1984. The Series B
notes totaling $630,000 are held by the former shareholders of Yantis & Co.
During the years ended June 30, 2001 and 2000, $50,000 and $35,000 principal was
paid on the Series B notes, respectively.

As of June 30, 2001 and 2000, the outstanding Series B notes total $77,672 and
$127,672, respectively. Of these amounts $29,376 and $48,286 are owed to
officers and directors of the Company.

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

The indenture provides for a sinking fund deposit to be made by the Company each
year of not less than one-fourth of the Company's fiscal year "surplus net
earnings," which exceeds the amount of interest required to be paid on the
outstanding notes. If at any time the sinking fund deposits aggregate $10,000 or
more, the same will be applied to prepayment of the notes outstanding. At June
30, 2001, there was no sinking fund requirement, and in 2000, all sinking fund
deposits had been disbursed to the noteholders. The "surplus net earnings" is
the amount by which the consolidated net income, after adding back the current
year's interest on the outstanding notes, exceeds a $25,000 working capital
reserve.

See Note 2 for computation of "surplus net earnings" and sinking fund
requirements for years ended June 30, 2001, 2000, and 1999.

                                      21
<PAGE>

                   CHASE GENERAL CORPORATION AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - NOTES PAYABLE, SERIES B (CONTINUED)

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

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


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

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

<TABLE>
                                                                  2001       2000       1999
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
NET INCOME (LOSS)
  Chase General Corporation                                   $(11,446)  $(10,798)  $(11,829)
  Dye Candy Company                                            (15,745)    53,082     61,091
                                                              --------   --------   --------
     Consolidated net income (loss)                            (27,191)    42,284     49,262

NON-ALLOWANCE EXPENSE DEDUCTION
  Interest on indebtedness                                       6,160      8,842     10,571
                                                              --------   --------   --------
       Net income (loss) basis for "surplus net earnings"      (21,031)    51,126     59,833

DEDUCTIONS FROM INCOME BASIS
  Set aside as reserve for accumulation of working capital      25,000     25,000     25,000
                                                              --------   --------   --------
          "Surplus net earnings (loss)"                        (46,031)    26,126     34,833

INTEREST PAYMENT REQUIRED                                        6,160      8,842     10,571
                                                              --------   --------   --------
EXCESS "SURPLUS NET EARNINGS (LOSS)"
 OVER INTEREST PAYMENT REQUIRED                               $(52,191)  $ 17,284   $ 24,262
                                                              ========   ========   ========
SINKING FUND REQUIREMENT                                      $     --   $  4,321   $  6,066
                                                              ========   ========   ========

</TABLE>



                                      22
<PAGE>

                   CHASE GENERAL CORPORATION AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - COMMITMENTS

Dye Candy Company leases its manufacturing facilities located at 3600 Leonard
Road, St. Joseph, Missouri.  The period of the lease is from April 1, 1995
through March 31, 2005, and requires payments of $2,955 per month.  Rental
expense was $35,460 for the years ended June 30, 2001, 2000, and 1999.  The
amounts are included in cost of sales.

Future minimum lease payments under this lease are as follows:

<TABLE>
<CAPTION>

<S>                                          <C>
Year ending June 30, 2002                     $ 35,460
Year ending June 30, 2003                       35,460
Year ending June 30, 2004                       35,460
Year ending June 30, 2005                       29,550
                                              --------

   Total                                      $135,930
                                              ========
</TABLE>

NOTE 4 - CAPITAL STOCK

Capital stock authorized, issued and outstanding as of June 30, 2001 and 2000 is
as follows:

<TABLE>
<CAPTION>

                                                           Shares
                                                  ---------------------------
                                                                  Issued and
                                                  Authorized      Outstanding
                                                  ----------      -----------
<S>                                               <C>            <C>
Prior Cumulative Preferred Stock, $5 par value:
   6% Convertible                                   240,000
     Series A                                                       100,000
     Series B                                                       100,000

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

Common Stock, $1 par value:
   Reserved for conversion of
     Preferred Stock - 1,033,333 shares           2,000,000         969,834

</TABLE>

                                      23
<PAGE>

                   CHASE GENERAL CORPORATION AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4 - CAPITAL STOCK (CONTINUED)

Cumulative Preferred Stock dividends in arrears at June 30, 2001 and 2000,
totaled $6,027,726 and $5,899,654, respectively.  Total dividends in arrears, on
a per share basis, consist of the following at June 30:

<TABLE>

                                              2001               2000
                                            --------           --------
<S>                                        <C>                <C>
6% Convertible
 Series A                                     $ 12               $ 12
 Series B                                       12                 12

5% Convertible
 Series A                                       51                 50
 Series B                                       51                 50

</TABLE>

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

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


NOTE 5 - PROVISION FOR INCOME TAXES

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

<TABLE>
<CAPTION>

                                        2001      2000     1999
                                      -------   -------  -------
<S>                                   <C>       <C>      <C>
Federal income tax                    $(4,898)  $ 9,213  $ 7,551
State income tax                       (1,887)    3,190    3,104
                                      -------   -------  -------

  Total provision for income taxes    $(6,785)  $12,403  $10,655
                                      =======   =======  =======
</TABLE>

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



                                      24
<PAGE>

                   CHASE GENERAL CORPORATION AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6 - LOSS PER SHARE

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

<TABLE>

                                                           2001           2000       1999
                                                        ---------       --------   --------
<S>                                                     <C>             <C>        <C>
Net income (loss)                                       $ (27,191)      $ 42,284   $ 49,262
                                                        ---------       --------   --------

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

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

       Net loss - common stockholders                   $(155,263)      $(85,788)  $(78,810)
                                                        =========       ========   ========

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

       Loss per share                                   $    (.16)      $   (.09)  $   (.09)
                                                        =========       ========   ========

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


NOTE 7 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

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


NOTE 8 - CONCENTRATION OF CREDIT RISK

For the years ending June 30, 2001 and 2000, two customers accounted for 54.18%
and 40.09%, respectively, of the gross sales.  For the year ending June 30, 2001
one customer accounted for 38.89% of accounts receivable and for the year ending
June 30, 2000 two customers accounted for 53.01% of accounts receivable.



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

                                      25
<PAGE>

                                   PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
          --------------------------------------------------
<TABLE>
<CAPTION>

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

          Name            Age     Periods of Service as Director     Terms
     ---------------     -----   --------------------------------  ---------
<S>                      <C>    <C>                               <C>
     Barry M. Yantis       56             1980 to present           One year
     Brian A. Yantis       55              July 16, 1986            One year
     Brett A. Yantis       33       January 21, 1999 to present     One year
</TABLE>

     An insufficient number of proxies were returned by the
     shareholders for the January 19, 2001 annual stockholder meeting.
     Therefore, the Directors noted above are continuing for an
     additional one-year term.

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

<TABLE>
<CAPTION>

          (b)  Executive Officers
               ------------------
                                                   Years of
                                                  Service as
            Name           Age      Position      an Officer         Term
     ---------------     ------   -------------  ------------   ---------------
<S>                     <C>      <C>            <C>            <C>
     Barry M. Yantis      56      President and       21        Until successor
                                    Treasurer                       elected

     Brian A. Yantis      55      Vice-President      10        Until successor
                                  and Secretary                     elected
</TABLE>


          (c)  Certain Significant Employees
               -----------------------------

               There are no significant employees other than above.

          (d)  Family Relationships
               --------------------

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

          (e)  Business Experience
               -------------------

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

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

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

                                  (Continued)

                                      26
<PAGE>

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

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

          (f)  Involvement in Certain Legal Proceedings
               ----------------------------------------

               Not applicable

          (g)  Promoters and Control Persons
               -----------------------------

               Not applicable


ITEM 11 - EXECUTIVE COMPENSATION
--------------------------------

          (a)  General
               -------

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

          (b)
                          Summary Compensation Table

<TABLE>
<CAPTION>

                                                                               Long Term Compensation
                                                                            -----------------------------
                                                 Annual Compensation               Awards         Payouts
                                           -------------------------------  --------------------  -------
                                                                 Other      Restricted
               Name and         Fiscal                           Annual       Stock     Option/    LTIP     All other
           Principal Position   Year End     Salary    Bonus   Compensation  Award ($)   SARs (#)  Payouts  Compensation
           ------------------  -----------  --------  -------  ------------  ----------  --------  -------  ------------
           <S>                 <C>          <C>       <C>      <C>           <C>         <C>       <C>      <C>

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

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

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

           Barry M. Yantis     1) 06-30-98  $100,000  $15,750     $2,240         --         --       --          --
           </TABLE>

          1)  CEO

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

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


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

               Not applicable

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

               Not applicable

                                  (Continued)

                                      27
<PAGE>

ITEM 11 - EXECUTIVE COMPENSATION (CONTINUED)
--------------------------------

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

               Not applicable

          (f)  Defined benefit or actuarial plan disclosure
               --------------------------------------------

               Not applicable

          (g)  Compensation of Directors
               -------------------------

               Directors are not compensated for services on the board. The
               directors are reimbursed for travel expenses incurred in
               attending board meetings. During the fiscal year 2001, $83 of
               travel expenses were reimbursed to board members, Brian A.
               Yantis, and Barry M. Yantis, respectively.

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

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

          (i)  Report on repricing of option/SARs
               ----------------------------------

               Not applicable

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

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

          (k)  Board compensation committee report on executive compensation
               -------------------------------------------------------------

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

          (l)  Performance graph
               -----------------

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

                                  (Continued)

                                      28
<PAGE>

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          ---------------------------------------------------
          MANAGEMENT
          ----------
<TABLE>
<CAPTION>
                                                                        Amounts
                                                                          and
                                                                         Nature
                                                                           of
                                                                       Beneficial
      Title of Class                    Name and Address               Ownership     % of Class
--------------------------              ----------------               ----------    ----------
<S>                                    <C>                            <C>           <C>
(a) Security ownership of certain beneficial owners

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

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

(b) Security ownership of management

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

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

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

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

                                                                        Amounts
                                                                          and
                                                                         Nature
                                                                           of
                                                                       Beneficial
      Title of Class                    Name and Address               Ownership     % of Class
--------------------------              ----------------               ----------    ----------
<S>                                    <C>                            <C>           <C>

    Cumulative Preferred, $20 par       All directors and officers         630         6.6%
    value:  Series B, $5 convertible    as a group
</TABLE>

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

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

(c) No known change of control is anticipated.



                                  (Continued)

                                      29
<PAGE>

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
          ----------------------------------------------

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

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

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

               Not applicable

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

               Not applicable

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

               Not applicable

                                    PART IV

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

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

               (1) The following are included in Part II of this report:
<TABLE>
<CAPTION>
                                                                    Page Number
                                                                    -----------
<S>                                                                <C>

               Independent Auditor's Report                             13
               Consolidated Balance Sheets - June 30, 2001 and 2000     14 - 15
               Consolidated Statements of Operations for the years
                 ended June 30, 2001, 2000, and 1999                    16
               Consolidated Statements of Stockholders' Equity for
                 the years ended June 30, 2001, 2000, and 1999          17
               Consolidated Statements of Cash Flows for the years
                 ended June 30, 2001, 2000, and 1999                    18 - 19
               Summary of Significant Accounting Policies               20 - 21
               Notes to Consolidated Financial Statements               22 - 26

</TABLE>



                                  (Continued)

                                       30
<PAGE>

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

          (2)  The following are included in Part IV of this report:
<TABLE>
<CAPTION>
                                                                           Page Number
                                                                           -----------
          <S>                                                              <C>
          Independent Auditor's Report on Supplemental Schedules               33

          Schedule I:  Condensed Financial Information of the Registrant     34 - 37

          Schedule II: Valuation and Qualifying Accounts, June 30, 2001,
                         2000, and 1999                                        38
</TABLE>

          (b)  Reports on Form 8-K
               -------------------

               No reports on Form 8-K were filed during the fourth quarter of
               the year ended June 30, 2001.

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

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

               (3)  Articles of Incorporation and By-Laws

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

               (4)   Rights of security holders including indentures - Refer to
                     Notes 1 and 4.

               (11)  Computation of per share earnings - Refer to Note 6.

               (21)  Subsidiaries of registrant - Refer to "Summary of
                     Significant Accounting Policies".

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

               Schedules required by Regulation S-X contained on page 34 through
               38 have been excluded from the annual report to the shareholders.

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

               (1)  With this filing, the Registrant is furnishing to the
                    Commission four (4) copies of the Proxy Statement regarding
                    the January 19, 2001 annual meeting mailed to security
                    holders during the 2001 fiscal year.

               (2)  For the 2001 fiscal year, the Registrant will furnish a copy
                    of the annual report and any Proxy information to the
                    Commission at time the aforementioned are mailed to security
                    holders.

                                      31
<PAGE>

            INDEPENDENT AUDITOR'S REPORT ON SUPPLEMENTAL SCHEDULES

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


Clifton Gunderson LLP
St. Joseph, Missouri
September 5, 2001

                                      32
<PAGE>

                                                                      SCHEDULE I



                   CHASE GENERAL CORPORATION AND SUBSIDIARY
               CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

                           CHASE GENERAL CORPORATION
                               (Registrant Only)
                           CONDENSED BALANCE SHEETS

                            June 30, 2001 and 2000

                                    ASSETS
<TABLE>
<CAPTION>

<S>                                       <C>           <C>
                                               2001         2000
                                           -----------   -----------

Investment in subsidiary - at equity       $   639,759   $   719,500
                                           -----------   -----------

TOTAL ASSETS                               $   639,759   $   719,500
                                           ===========   ===========

</TABLE>

                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>

<S>                                       <C>           <C>
Series B notes payable and accrued
 interest, unrelated parties               $    52,127   $    84,802
Series B notes payable and accrued
 interest, related parties                      31,706        51,581
                                           -----------   -----------

  Total liabilities                             83,833       136,383
                                           -----------   -----------

Capital stock                                3,331,274     3,331,274
Paid in capital in excess of par             3,134,722     3,134,722
Accumulated (deficit)                       (5,910,070)   (5,882,879)
                                           -----------   -----------

  Total stockholders' equity                   555,926       583,117
                                           -----------   -----------

TOTAL LIABILITIES AND STOCKHOLDERS'
 EQUITY                                    $   639,759   $   719,500
                                           ===========   ===========

</TABLE>

(1)  The restricted assets of 100% consolidated subsidiary, Dye Candy Company,
     are $714,901 and $800,691 as of June 30, 2001 and 2000, respectively. See
     "Notes to Financial Statements" in Part II of this report for restrictions.

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



                                  (Continued)

                                       33
<PAGE>

                                                                      SCHEDULE I
                                                                     (Continued)



                   CHASE GENERAL CORPORATION AND SUBSIDIARY
               CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT


                           CHASE GENERAL CORPORATION
                               (Registrant Only)
                      CONDENSED STATEMENTS OF OPERATIONS
                   Years Ended June 30, 2001, 2000 and 1999

<TABLE>
<CAPTION>
                                                 2001       2000    1999
                                               --------   -------  -------
<S>                                            <C>        <C>      <C>
REVENUE

  Equity in net income (loss) of subsidiary    $(15,745)  $53,082  $61,091
                                               --------   -------  -------

     Total revenue                              (15,745)   53,082   61,091
                                               --------   -------  -------

EXPENSE

  General and administrative                      8,399     4,645    4,204
  Interest                                        6,160     8,842   10,571
                                               --------   -------  -------

     Total expense                               14,559    13,487   14,775
                                               --------   -------  -------

       Income (loss) before income taxes        (30,304)   39,595   46,316

PROVISION (CREDIT) FOR
  INCOME TAXES                                   (3,113)    2,689    2,946
                                               --------   -------  -------

NET INCOME (LOSS)                              $(27,191)  $42,284  $49,262
                                               ========   =======  =======

</TABLE>



                                  (Continued)

                                       34
<PAGE>

                                                                      SCHEDULE I
                                                                     (Continued)



                   CHASE GENERAL CORPORATION AND SUBSIDIARY
               CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT


                           CHASE GENERAL CORPORATION
                               (Registrant Only)
                      CONDENSED STATEMENTS OF CASH FLOWS
                   Years Ended June 30, 2001, 2000 and 1999

<TABLE>
<CAPTION>
                                                       2001          2000          1999
                                                     --------      --------      --------
<S>                                                  <C>           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES

   General and administrative expenses paid          $ (8,399)     $ (4,645)     $ (4,204)
   Interest paid                                       (8,842)      (10,571)      (12,109)
   Income tax refund received                           2,689         2,946         4,392
                                                     --------      --------      --------

      Net cash used in operating activities           (14,552)      (12,270)      (11,921)
                                                     --------      --------      --------

CASH FLOWS FROM INVESTING ACTIVITIES

   Advances received from wholly owned subsidiary      64,552        47,270        34,554
                                                     --------      --------      --------

CASH FLOWS FROM FINANCING ACTIVITIES

   Principal payments on Series B notes payable       (50,000)      (35,000)      (22,633)
                                                     --------      --------      --------

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

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

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

                                  (Continued)

                                      35
<PAGE>

                                                                      SCHEDULE I
                                                                     (Continued)



                   CHASE GENERAL CORPORATION AND SUBSIDIARY
               CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT


                           CHASE GENERAL CORPORATION
                               (Registrant Only)
                      CONDENSED STATEMENTS OF CASH FLOWS
                   Years Ended June 30, 2001, 2000 and 1999

<TABLE>
<CAPTION>
                                                                   2001          2000          1999
                                                                 --------      --------      --------
<S>                                                              <C>           <C>           <C>
RECONCILIATION OF NET INCOME TO NET
   CASH USED IN OPERATING ACTIVITIES

   Net income (loss)                                             $(27,191)     $ 42,284      $ 49,262
   Adjustments to reconcile net income (loss) to net cash
      used in operating activities:
      Net (income) loss from wholly owned subsidiary               15,745       (53,082)      (61,091)
      Effects of changes in operating assets and liabilities:
         Accrued interest                                          (2,550)       (1,729)       (1,538)
         Income tax refund receivable                                (556)          257         1,446
                                                                 --------      --------      --------
NET CASH USED IN OPERATING ACTIVITIES                            $(14,552)     $(12,270)     $(11,921)
                                                                 ========      ========      ========
</TABLE>

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

                                      36
<PAGE>

                                                                     SCHEDULE II




                   CHASE GENERAL CORPORATION AND SUBSIDIARY
                       VALUATION AND QUALIFYING ACCOUNTS
                         June 30, 2001, 2000, and 1999

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

   June 30, 2001                        $11,393             $ 2,225             $ 2,949         $10,669
   June 30, 2000                         11,516              20,603              20,726          11,393
   June 30, 1999                         11,604              (4,012)              3,924          11,516
</TABLE>
----------------
* Represents accounts written off, net of (recoveries), for the respective
  years.

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

                                      37
<PAGE>

                                  SIGNATURES


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


                                            CHASE GENERAL CORPORATION
                                            (Registrant)


Date: 9-26-01                           By: /s/ Barry M. Yantis
      -------                               --------------------------
                                            Barry M. Yantis, President


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

                             President, Treasurer (Principal Executive
                             Officer and Chief Financial and Accounting
/s/ Barry M. Yantis          Officer) and Director                       9-26-01
---------------------------                                              -------
Barry M. Yantis                                                           Date


/s/ Brian A. Yantis          Vice-President, Secretary and Director      9-25-01
---------------------------                                              -------
Brian A. Yantis                                                           Date