**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

 

**FORM 10-K**

 

**x****      ANNUALREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934**

 

**For thefiscal year ended December 31, 2009**

 

**o****         TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934**

 

**For thetransition period from                to                  .**

 

**CommissionFile Number 0-21609**

 

**CHASE PACKAGING CORPORATION**

(Exact name ofregistrant as specified in its charter)

 

| **Texas**                                                       | ** ** | **93-1216127**                        |
|-----------------------------------------------------------------|------------|---------------------------------------|
| (State or other  jurisdiction of incorporation or organization) |       | (I.R.S. Employer  Identification No.) |

 

| **636  River Road, Fair Haven, NJ**       | ** ** | **07704**  |
|-------------------------------------------|------------|------------|
| (Address of  principal executive offices) |       | (Zip Code) |

 

Registrant’stelephone number, including area code:  (**732) 741.1500**

 

Securities registeredpursuant to Section 12(b) of the Act:**  None**

 

Securities registeredpursuant to Section 12(g) of the Act: **Common Stock, par value $.10 per share**

 

Indicate by check mark ifthe registrant is a well-known seasoned issuer, as defined in Rule 405 ofthe Securities Act. Yes o  No x

 

Indicate by check mark ifthe registrant is not required to file reports pursuant to Section 13 or Section 15(d) ofthe Act. Yes o  Nox

 

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

 

Indicate by check whetherthe registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and postedpursuant to Rule 405 of Regulation S-T during the preceding 12 months (orfor such shorter period that the registrant was required to submit and postsuch filed).Yes o  No o

 

Indicate by check mark ifdisclosure of delinquent filers pursuant to Item 405 of Regulation S-K(229.405) is not contained herein, and will not be contained, to the best ofRegistrant’s knowledge, in definitive proxy or information statementsincorporated by reference in Part III of this Form 10-K or anyamendment to this Form 10-K. x

 

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

 

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

 

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theExchange Act). Yes x  No o

 

The aggregate marketvalue of the voting and non-voting common equity held by non-affiliatescomputed by reference to the price at which the common equity was last sold asof the last business day of the Registrant’s most recently completedsecond  fiscal quarter was $959,837.

 

Number of shares ofcommon stock outstanding as of March 24, 2010:  15,536,275

 

**Documentsincorporated by reference**

 

Listed below aredocuments, parts of which are incorporated herein by reference, and the part ofthis report into which the document is incorporated:

 

### **Proxy statement for the 2010 annual meeting of shareholders — Part III**

 

 

 

----

 

### **PART I**

### ** **

**ITEM 1.****         ****BUSINESS.**

 

**General**

 

Chase PackagingCorporation (“Chase,” the “Company,” “we,” or “us”) is a Texas corporationwhich, prior to 1998, was engaged in the specialty packaging business,primarily as a supplier of packaging products to the agriculturalindustry.  During 1997, the Companycommenced an orderly liquidation of its assets (described below) which wascompleted in 1997.  At present, managementof the Company is seeking to secure a suitable merger partner wishing to gopublic or to acquire private companies to create investment value for theCompany.  For purposes of Rule 12b-2of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), theCompany is considered a shell company.

 

#### **History**

#### ** **

*Prior Business Operations*

 

The Company wasestablished in July of 1993 as a wholly-owned subsidiary of TGC Industries, Inc.  On July 30, 1993, the Company purchasedcertain assets of Union Camp Corporation’s packaging division for a purchaseprice of approximately $6.14 million. The assets purchased included substantially all of the business ofweaving and constructing Saxolin® paper mesh and polypropylene plastic meshbagging material for agricultural and industrial applications and substantiallyall of the properties related to Union Camp’s packaging division. Theproperties acquired by Chase consisted of Union Camp’s plant facilities locatedin Portland, Oregon, and Idaho Falls, Idaho, and all machinery, equipment, andinventories connected with these facilities.

 

The Company experiencedlosses from 1994 through 1997, and in 1997 the Company’s secured lender decidednot to renew the Company’s operating line of credit.  The Company’s Board of Directors thereforedetermined that it was in the best interest of the Company and all of itscreditors to liquidate in an orderly fashion.

 

Effective July 21,1997, the Company sold its operations at Idaho Falls, Idaho, to LockwoodPacking Corporation (“Lockwood”) as a going concern.  The assets sold included substantially all ofthe Company’s equipment, furniture, fixtures, and other assets located in theIdaho Falls, Idaho, facility for a total of $75,000.  In addition, the Company sold inventory fromthe Idaho Falls operation to Lockwood for $255,000.  The proceeds from these sales were used toreduce the Company’s loan balance with its lender.

 

On July 25, 1997,the Company notified its creditors by mail that the Company would begin anorderly liquidation of all of its remaining assets, outside of a formalbankruptcy or receivership proceeding, in a manner intended to maximize theasset values. The Company retained the firm of Edward Hostmann, Inc. toassist the Company in such liquidation which was completed during 1997.

 

*Post-Liquidation Operations*

 

Since 1999, the Board of Directors has devoted itsefforts to establishing a new business or engaging in a merger or otherreorganization transaction and, accordingly, the Company is being treated as adevelopment stage company in accordance with the Financial Accounting StandardsBoard’s (“FASB”) Accounting Standards Codification (“ASC”) 915 effective January 1,1999.

 

The Company closeda private placement of 13,334 Units on September 7, 2007.  Each Unit was sold for  $150 and consisted of:  one share of Series A 10% Convertible Preferred Stock ($100 statedvalue) convertible into 1,000 shares of the Company’s common stock (the “commonstock”); 500 shares of common stock; and 500 five-year warrants, each warrantexercisable for one share of common stock at $0.15 per share.  Gross proceeds from the offering were$2,000,100, expenses of the offering were approximately $38,000, and netproceeds were approximately $1,962,000.

 

2

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**ITEM1A.****          ****RISK FACTORS.**

 

***The expensesrelated to identifying a target business and to complete a business combinationwill increase our losses.***

 

Until presented with aspecific opportunity for a business combination, we will be unable to ascertainwith any degree of certainty the time and costs required to select and evaluatea target business and to structure and complete the businesscombination.  Any costs incurred in connection with theidentification and evaluation of a prospective target business with which abusiness combination is not ultimately completed will result in a loss to usand reduce the amount of capital otherwise available to complete a businesscombination and thereafter operate the acquired business.  We cannotprovide assurance that we will be successful in identifying a target businessand completing a business combination on terms favorable to our shareholders,if at all.

 

***The taxtreatment of a potential business combination is not clear.***

 

We will endeavor tostructure a business combination so as to achieve the most favorable taxtreatment to us and to the target business and the shareholders of bothcompanies.  We cannot provide assurance that the Internal Revenue Serviceor appropriate state tax authorities will agree with our tax treatment of thebusiness combination.

 

***We have limitedability to evaluate management’s target business.  We cannot anticipate what role, if any, ourmanagement will play in a combined business and whether our management has thenecessary experience to manage the combined business.  We do not know if we will be able to recruitmore management if necessary.***

 

Although we intend tocarefully scrutinize the management of a prospective target business beforeeffecting a business combination, we cannot assure you that our assessment ofthe target’s management will prove to be correct.  In addition, wecannot assure you that the target’s future management will have the necessaryskills, qualifications, or abilities to manage a public company.  Furthermore,the future role of our officers and directors, if any, in the target businesscannot presently be stated with any certainty.  While it is possiblethat one or more of our officers and directors will remain associated in somecapacity following a business combination, it is uncertain whether all of themwill devote their full efforts to our affairs after a businesscombination.  Moreover, we cannot assure you that our officers anddirectors will have significant experience or knowledge relating to theoperations of the particular target business.

 

We may seek to recruitadditional management personnel to supplement the incumbent management of thetarget business.  We cannot assure you, however, that we will be ableto recruit additional managers who have the requisite skills, knowledge, orexperience necessary to enhance the incumbent management and successfullyoperate the target business.

 

***In our searchfor an appropriate combination partner, we will have to compete with otherentities with more experience and greater resources; after a successfulbusiness combination we will have to face the competitors of the operatingcompany we combine with.***

 

We may encounter intensecompetition from other entities seeking to combine with a privately held operatingcompany.  Many of these entities, including financial consultingcompanies and venture capital firms, have longer operating histories and haveextensive experience in identifying and effecting businesscombinations.  Many of these competitors also possess significantlygreater financial, technical, and other resources than we do.  Wecannot assure you that we will be able to effectively compete with theseentities. Consequently, we may acquire a company with less favorable prospectsthen we would otherwise prefer, thus making our long-term prospects for successless likely.

 

If we effect a businesscombination, we will become subject to competition from the competitors of theacquired business.  In particular, industries that experience rapidgrowth frequently attract larger numbers of competitors, including competitorswith greater financial, marketing, technical, and other resources than ourresources.  We cannot ascertain the level of competition we will faceif we effect a business combination, and we cannot assure you that we will beable to compete successfully with these competitors.

 

3

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***The Pink Sheetsare characterized by high volatility which may negatively affect our stockprice.***

 

Our common stock isquoted on the Pink Sheets under the symbol “CPKA.”  The Pink Sheets,and the price of our common stock, are characterized by highvolatility.  We cannot guarantee any market for our shares of commonstock and cannot guarantee that any stable market for our shares of commonstock will develop or be sustained.  We cannot predict the effect, ifany, that our business activities or a business combination might have on themarket price.

 
| **ITEM  1B.** | **UNRESOLVED  STAFF COMMENTS.** |
|---------------|---------------------------------|

 

None.

 
| **ITEM  2.** | **PROPERTIES.** |
|--------------|-----------------|

 

The Company neither rentsnor owns any properties.  The Companyutilizes the office space and equipment of its management at no cost.  Management estimates such amounts to beimmaterial.  The Company currently has nopolicy with respect to investment or interests in real estate, real estatemortgages, or securities of, or interests in, persons primarily engaged in realestate activities.

 
| **ITEM  3.** | **LEGAL  PROCEEDINGS.** |
|--------------|-------------------------|

 

None.

 
| **ITEM  4.** | **RESERVED.** |
|--------------|---------------|

 

##### **PART II**

##### ** **

| **ITEM 5.** | **MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS,  AND ISSUER PURCHASES OF EQUITY SECURITIES.** |
|-------------|--------------------------------------------------------------------------------------------------------------------------|

** **

The Company’s commonstock trades in the Pink Sheets under the symbol “CPKA.”  American Stock Transfer and Trust Company hasdetermined that there were approximately 282 holders of record on December 31,2009.  Trading volume in the Company’ssecurities has been nominal.  The lastreported high and low prices on December 31, 2009 were $0.24 and $0.15,respectively, and the last trade was $0.15.

 

High and low closingstock prices for the Company’s common stock in the years ended December 31,2009 and December 31, 2008 are displayed in the following table:

 
| ** **         | ** ** | **2009 Market Price** | ** ** | **2008 Market Price** | ** ** |
|--------------------|------------|-----------------------|------------|-----------------------|------------|
| **Quarter  Ended** | ** ** | **High**              | ** ** | **Low**               | ** ** | **High** | ** ** | **Low** | ** ** |
|               |       |                  |       |                  |       |   |   |   |   |
| March 31      |       | $                     | 0.10       |                  | $          | 0.10 |   | $ | 0.25 |   | $ | 0.20 |   |
| June 30       |       | $                     | 0.10       |                  | $          | 0.10 |   | $ | 0.25 |   | $ | 0.05 |   |
| September 30  |       | $                     | 0.25       |                  | $          | 0.25 |   | $ | 0.25 |   | $ | 0.12 |   |
| December 31   |       | $                     | 0.24       |                  | $          | 0.15 |   | $ | 0.51 |   | $ | 0.02 |   |

 

The Company has neverpaid cash dividends on its shares of common stock and does not anticipate thepayment of dividends on its shares of common stock in the foreseeable future.

 

**ITEM 6.****         ****SELECTED FINANCIAL DATA.**

 

Not Applicable.

 

4

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** **
| **ITEM 7.** | **MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND RESULTS OF OPERATION.** |
|-------------|-------------------------------------------------------------------------------------------------|

** **

**Resultsof Operations**

 

**During 2009, the Company had no operations and itsonly income was from interest income on its short-term investments which areclassified as cash and cash equivalents. General and administrative expenses were $94,880 in fiscal 2009 comparedto $207,667 in fiscal 2008. The additional expenses of $112,787 in 2008 wereprimarily due to professional fees incurred in connection with the filing of a Form S-1registration statement. The Company had fiscal 2009 interest and other incomeof $2,720, and a net loss of ($92,160), compared with interest and other incomeof $31,476, and a net loss of ($176,191) for fiscal 2008.**

** **

**Liquidityand Capital Resources**

 

At December 31,2009, the Company had cash and cash equivalents of approximately$1,671,600.  Cash and cash equivalents consist of money market fundsand U.S. Treasury Bills.  Working capital at December 31, 2009was approximately $1,669,000.  Management believes that its cash andcash equivalents are sufficient for its business activities for at least thenext twelve months and for the costs of seeking an acquisition of an operatingbusiness.

 

Net cash of approximately$97,000 was used in operations during fiscal 2009, a decrease of approximately$90,000 over the $187,000 used in operations during fiscal2008.  This decrease resulted primarily from legal fees associatedwith submitting to the Securities and Exchange Commission a Form S-1registration statement during 2008.

 

No cash flows were usedor provided by investing activities for each of the periods presented.

 

Net cash of approximately$1,100 was used in financing activities during fiscal 2009, a decrease ofapproximately $2,000 over approximately $3,100 provided by financing activitiesduring fiscal 2008.

 

**NewAuthoritative Pronouncements**

 

See Note 2, “Summary ofSignificant Accounting Policies,” in the notes to the financial statements inItem 8 for a full description of recently issued accounting pronouncements,including the expected dates of adoption and estimated effects on results ofoperations and financial condition, which is incorporated herein.

 

**FactorsWhich May Affect Future Results**

 

Future earnings of theCompany are dependent on interest rates earned on the Company’s investedbalances and expenses incurred. The Company expects to incur significantexpenses in connection with its objective of identifying  a merger partner or acquiring an operatingbusiness.

 
| **ITEM 7A.** | **QUANTITATIVE AND QUALITATIVE  DISCLOSURES ABOUT MARKET RISK.** |
|--------------|------------------------------------------------------------------|

 

Not Applicable.

 

5

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** **
| **ITEM 8.** | **FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.** |
|-------------|--------------------------------------------------|

** **

**CHASE PACKAGING CORPORATION**

**FOR THE YEARS ENDEDDECEMBER 31, 2009 AND 2008**

** **

**- INDEX TO FINANCIAL STATEMENTS -**

 
| ** **                                               | **Page(s)** |
|----------------------------------------------------------|-------------|
|                                                     |        |
| Report of  Independent Registered Public Accounting Firm | 7           |
|                                                     |        |
| Financial Statements:                                    |        |
|                                                     |        |
| Balance  Sheets                                          | 8           |
|                                                     |        |
| Statements  of Operations                                | 9           |
|                                                     |        |
| Statements of Shareholders’ Equity                  | 10 - 11     |
|                                                     |        |
| Statements  of Cash Flows                                | 12          |
|                                                     |        |
| Notes to Financial Statements                            | 13 - 19     |

 

6

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**REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

 

To the Board ofDirectors andShareholders of Chase Packaging Corporation

 

We have audited theaccompanying balance sheets of Chase Packaging Corporation (a development stagecompany) (the “Company”) as of December 31, 2009 and 2008, and the relatedstatements of operations, shareholders’ equity, and cash flows for each of theyears in the two-year period ended December 31, 2009 and the amounts inthe cumulative from inception column in the statements of operations and cashflows from January 1, 1999 to December 31, 2009. Chase PackagingCorporation’s management is responsible for these financial statements. Ourresponsibility is to express an opinion on these financial statements based onour audits.

 

We conducted our auditsin accordance with the standards of the Public Company Accounting OversightBoard (United States). Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. The Company is not required to have, nor were weengaged to perform, an audit of its internal control over financial reporting.Our audit included consideration of internal control over financial reportingas a basis for designing audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion. An audit also includes examining, on atest basis, evidence supporting the amounts and disclosures in the financialstatements, assessing the accounting principles used and significant estimatesmade 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, thefinancial statements referred to above present fairly, in all materialrespects, the financial position of Chase Packaging Corporation as of December 31,2009 and 2008, and the results of its operations and its cash flows for each ofthe years in the two-year period ended December 31, 2009 and the amountsin the cumulative from inception column in the statements of operations andcash flows from January 1, 1999 to December 31, 2009, in conformitywith accounting principles generally accepted in the United States of America.

 

 
| /s/ ParenteBeard LLC |   |
|----------------------|--------|
|                 |   |
| ParenteBeard LLC     |   |
|                 |   |
| New  York, New York  |   |
|                 |   |
| March 30, 2010  |   |

 

7

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**CHASE PACKAGING CORPORATION**

**(A Development Stage Company)**

**BALANCESHEETS**

## **DECEMBER 31, 2009 AND2008**

** **
| ** **                                                                                                                                                                                                                                                                                                     | ** ** | **2009**   | ** ** | **2008**   | ** ** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|------------|------------|------------|
| ** **                                                                                                                                                                                                                                                                                                     | ** ** | ** ** |       |       |       |
| **-  ASSETS -**                                                                                                                                                                                                                                                                                                |       |       |       |       |       |
| **CURRENT ASSETS:**                                                                                                                                                                                                                                                                                            |       |       |       |       |       |
| Cash  and cash equivalents                                                                                                                                                                                                                                                                                     |       | $          | 1,671,574  |       | $          | 1,769,739 |   |
| ** **                                                                                                                                                                                                                                                                                                     |       |       |       |       |       |
| **TOTAL ASSETS**                                                                                                                                                                                                                                                                                               |       | $          | 1,671,574  |       | $          | 1,769,739 |   |
| ** **                                                                                                                                                                                                                                                                                                     | ** ** | ** ** |       |       |       |
| **-  LIABILITIES AND SHAREHOLDERS’ EQUITY -**                                                                                                                                                                                                                                                             | ** ** | ** ** |       |       |       |
| ** **                                                                                                                                                                                                                                                                                                     | ** ** | ** ** |       |       |       |
| **CURRENT LIABILITIES:**                                                                                                                                                                                                                                                                                       | ** ** | ** ** |       |       |       |
| Accounts  payable and accrued expenses                                                                                                                                                                                                                                                                         |       | $          | 2,509      |       | $          | 7,354 |   |
|                                                                                                                                                                                                                                                                                                           |       |       |       |       |       |
| **TOTAL CURRENT LIABILITIES**                                                                                                                                                                                                                                                                                  |       | 2,509      |       | 7,354      |       |
| ** **                                                                                                                                                                                                                                                                                                     |       |       |       |       |       |
| **COMMITMENTS AND CONTINGENCIES**                                                                                                                                                                                                                                                                              |       |       |       |       |       |
| ** **                                                                                                                                                                                                                                                                                                     |       |       |       |       |       |
| **SHAREHOLDERS’ EQUITY:**                                                                                                                                                                                                                                                                                 |       |       |       |       |       |
| Preferred  stock, $1.00 par value; 4,000,000 shares authorized; Series A 10%  Convertible Preferred stock; 50,000 shares authorized; 17,078 and 15,536  shares issued and outstanding in 2009 and 2008, respectively; liquidation  preference of $1,707,800 and $1,553,600 in 2009 and 2008, respectively |       | 17,078     |       | 15,536     |       |
| Common  stock, $.10 par value 200,000,000 shares authorized; 15,536,275 shares issued  and outstanding                                                                                                                                                                                                         |       | 1,553,628  |       | 1,553,628  |       |
| Additional  paid-in capital                                                                                                                                                                                                                                                                                    |       | 4,079,945  |       | 4,082,647  |       |
| Accumulated  deficit                                                                                                                                                                                                                                                                                           |       | (3,626,121 | )          | (3,626,121 | )          |
| Deficit  accumulated during the development stage                                                                                                                                                                                                                                                              |       | (355,465   | )          | (263,305   | )          |
| **TOTAL SHAREHOLDERS’ EQUITY**                                                                                                                                                                                                                                                                            |       | 1,669,065  |       | 1,762,385  |       |
|                                                                                                                                                                                                                                                                                                           |       |       |       |       |       |
| **TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY**                                                                                                                                                                                                                                                            |       | $          | 1,671,574  |       | $          | 1,769,739 |   |

 

The accompanying notesare an integral part of these financial statements.

## ** **

8

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## **CHASE PACKAGINGCORPORATION**

**(A Development Stage Company)**

## **STATEMENTS OFOPERATIONS**

 
| ** **                                                               | ** ** | **Cumulative  During the   Development Stage  (January 1, 1999 to** | ** ** | **For the Year Ended  December 31,** | ** ** |
|--------------------------------------------------------------------------|------------|--------------------------------------------------------------------------|------------|-------------------------------------------|------------|
| ** **                                                               | ** ** | **December 31, 2009**                                               | ** ** | **2009**                                  | ** ** | **2008** | ** ** |
| ** **                                                               | ** ** | ** **                                                               | ** ** | ** **                                |       |   |   |
| **NET SALES**                                                            |       | $                                                                        | —     |                                      | $          | — |   | $ | — |   |
| ** **                                                               |       |                                                                     |       |                                      |       |   |   |
| **EXPENSES:**                                                            |       |                                                                     |       |                                      |       |   |   |
|                                                                     |       |                                                                     |       |                                      |       |   |   |
| General  and administrative expense                                      |       | (405,387                                                                 | )          | 94,880                                    |       | 207,667 |   |
|                                                                     |       |                                                                     |       |                                      |       |   |   |
| **LOSS FROM OPERATIONS**                                                 |       | (405,387                                                                 | )          | (94,880                                   | )          | (207,667 | ) |
|                                                                     |       |                                                                     |       |                                      |       |   |   |
| **OTHER INCOME (EXPENSE)**                                               |       |                                                                     |       |                                      |       |   |   |
|                                                                     |       |                                                                     |       |                                      |       |   |   |
| Interest  expense                                                        |       | (8,591                                                                   | )          | —                                    |       | — |   |
| Interest  and other income                                               |       | 58,513                                                                   |       | 2,720                                     |       | 31,476 |   |
|                                                                     |       |                                                                     |       |                                      |       |   |   |
| **TOTAL OTHER INCOME**                                                   |       | 49,922                                                                   |       | 2,720                                     |       | 31,476 |   |
|                                                                     |       |                                                                     |       |                                      |       |   |   |
| **LOSS BEFORE INCOME TAXES**                                             |       | (355,465                                                                 | )          | (92,160                                   | )          | (176,191 | ) |
| ** **                                                               |       |                                                                     |       |                                      |       |   |   |
| Provision  for income taxes                                              |       | —                                                                   |       | —                                    |       | — |   |
|                                                                     |       |                                                                     |       |                                      |       |   |   |
| **NET LOSS**                                                             |       | $                                                                        | (355,465   | )                                         | $          | (92,160 | ) | $ | (176,191 | ) |
| ** **                                                               |       |                                                                     |       |                                      |       |   |   |
| **BASIC AND DILUTED LOSS PER COMMON SHARE**                              |       |                                                                     |       | $                                         | (.01       | ) | $ | (.01 | ) |
| **WEIGHTED AVERAGE COMMON SHARES OUTSTANDING —  BASIC AND DILUTED** | ** ** | ** **                                                               |       | 15,536,275                                |       | 15,536,275 |   |

 

The accompanyingnotes are an integral part of these financial statements.

 

9

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**CHASEPACKAGING CORPORATION**

**(A Development Stage Company)**

## **STATEMENTS OF SHAREHOLDERS’EQUITY**

 
| ** **                                            | ** ** | **Preferred  Stock** | ** ** | **Common  Stock** | ** ** | **Additional  Paid-  in** | ** ** | **Common  Stock** | ** ** | **Accumulated** | ** ** | **Deficit    Accumulated  During the  Development** | ** ** | ** **  | ** ** |
|-------------------------------------------------------|------------|----------------------|------------|-------------------|------------|---------------------------|------------|-------------------|------------|-----------------|------------|-----------------------------------------------------|------------|-------------|------------|
| ** **                                            | ** ** | **Shares**           | ** ** | **Amount**        | ** ** | **Shares**                | ** ** | **Amount**        | ** ** | **Capital**     | ** ** | **Subscribed**                                      | ** ** | **Deficit** | ** ** | **Stage** | ** ** | **Total** | ** ** |
|                                                  |       |                 |       |              |       |                      |       |              |       |            |       |                                                |       |        |       |   |   |   |   |
|                                                  |       |                 |       |              |       |                      |       |              |       |            |       |                                                |       |        |       |   |   |   |   |
| Balance  at January 1, 1999                      |       | —               |       | $                 | —     |                      | 7,002,964  |              | $          | 700,296         |       | $                                                   | 2,914,207  |        | $          | — |   | $ | (3,626,121 | ) | $ | — |   | $ | (11,618 | ) |
|                                                  |       |                 |       |              |       |                      |       |              |       |            |       |                                                |       |        |       |   |   |   |   |
| Net  loss for the year ended December 31, 1999   |       | —               |       | —            |       | —                    |       | —            |       | —          |       | —                                              |       | —      |       | (5,510 | ) | (5,510 | ) |
|                                                  |       |                 |       |              |       |                      |       |              |       |            |       |                                                |       |        |       |   |   |   |   |
| Balance  at December 31, 1999                    |       | —               |       | —            |       | 7,002,964                 |       | 700,296           |       | 2,914,207       |       | —                                              |       | (3,626,121  | )          | (5,510 | ) | (17,128 | ) |
|                                                  |       |                 |       |              |       |                      |       |              |       |            |       |                                                |       |        |       |   |   |   |   |
| Net  loss for the year ended December 31, 2000   |       | —               |       | —            |       | —                    |       | —            |       | —          |       | —                                              |       | —      |       | (891 | ) | (891 | ) |
|                                                  |       |                 |       |              |       |                      |       |              |       |            |       |                                                |       |        |       |   |   |   |   |
| Balance  at December 31, 2000                    |       | —               |       | —            |       | 7,002,964                 |       | 700,296           |       | 2,914,207       |       | —                                              |       | (3,626,121  | )          | (6,401 | ) | (18,019 | ) |
|                                                  |       |                 |       |              |       |                      |       |              |       |            |       |                                                |       |        |       |   |   |   |   |
| Private  placement and warrant exercise               |       | —               |       | —            |       | 1,624,311                 |       | 162,432           |       | (156,932        | )          | —                                              |       | —      |       | — |   | 5,500 |   |
| ** **                                            | ** ** | ** **           | ** ** | ** **        | ** ** | ** **                | ** ** | ** **        | ** ** | ** **      | ** ** | ** **                                          | ** ** | ** **  | ** ** | ** ** | ** ** | ** ** | ** ** |
| Net  loss for the year ended December 31, 2001   |       | —               |       | —            |       | —                    |       | —            |       | —          |       | —                                              |       | —      |       | (5,086 | ) | (5,086 | ) |
| ** **                                            | ** ** | ** **           | ** ** | ** **        | ** ** | ** **                | ** ** | ** **        | ** ** | ** **      | ** ** | ** **                                          | ** ** | ** **  | ** ** | ** ** | ** ** | ** ** | ** ** |
| Balance  at December 31, 2001                    |       | —               |       | —            |       | 8,627,275                 |       | 862,728           |       | 2,757,275       |       | —                                              |       | (3,626,121  | )          | (11,487 | ) | (17,605 | ) |
|                                                  |       |                 |       |              |       |                      |       |              |       |            |       |                                                |       |        |       |   |   |   |   |
| Stock  subscriptions                                  |       | —               |       | —            |       | —                    |       | —            |       | —          |       | 8,000                                               |       | —      |       | — |   | 8,000 |   |
|                                                  |       |                 |       |              |       |                      |       |              |       |            |       |                                                |       |        |       |   |   |   |   |
| Net loss for the year ended December 31, 2002    |       | —               |       | —            |       | —                    |       | —            |       | —          |       | —                                              |       | —      |       | (7,082 | ) | (7,082 | ) |
|                                                  |       |                 |       |              |       |                      |       |              |       |            |       |                                                |       |        |       |   |   |   |   |
| Balance at December 31, 2002                     |       | —               |       | —            |       | 8,627,275                 |       | 862,728           |       | 2,757,275       |       | 8,000                                               |       | (3,626,121  | )          | (18,569 | ) | (16,687 | ) |
|                                                  |       |                 |       |              |       |                      |       |              |       |            |       |                                                |       |        |       |   |   |   |   |
| Net loss for the year ended December 31, 2003    |       | —               |       | —            |       | —                    |       | —            |       | —          |       | —                                              |       | —      |       | (8,221 | ) | (8,221 | ) |
|                                                  |       |                 |       |              |       |                      |       |              |       |            |       |                                                |       |        |       |   |   |   |   |
| Balance at December 31, 2003                     |       | —               |       | —            |       | 8,627,275                 |       | 862,728           |       | 2,757,275       |       | 8,000                                               |       | (3,626,121  | )          | (26,790 | ) | (24,908 | ) |
|                                                  |       |                 |       |              |       |                      |       |              |       |            |       |                                                |       |        |       |   |   |   |   |
| Net income for the year ended December 31,  2004 |       | —               |       | —            |       | —                    |       | —            |       | —          |       | —                                              |       | —      |       | 1,237 |   | 1,237 |   |
|                                                  | ** ** | ** **           | ** ** | ** **        |       |                      |       |              |       |            |       |                                                |       |        |       |   |   |   |   |
| Balance at December 31, 2004                     |       | —               |       | —            |       | 8,627,275                 |       | 862,728           |       | 2,757,275       |       | 8,000                                               |       | (3,626,121  | )          | (25,553 | ) | (23,671 | ) |
|                                                  | ** ** | ** **           | ** ** | ** **        |       |                      |       |              |       |            |       |                                                |       |        |       |   |   |   |   |
| Net loss for the year ended December 31, 2005    |       | —               |       | —            |       | —                    |       | —            |       | —          |       | —                                              |       | —      |       | (16,627 | ) | (16,627 | ) |
| Balance at December 31, 2005                     |       | —               |       | —            |       | 8,627,275                 |       | 862,728           |       | 2,757,275       |       | 8,000                                               |       | (3,626,121  | )          | (42,180 | ) | (40,298 | ) |
|                                                       |            |                      |            |                   |            |                           |            |                   |            |                 |            |                                                     |            |             |            |  |  |  |  |  |  |  |  |  |  |  |

 

The accompanyingnotes are an integral part of these financial statements.

 

10

----

** **

**CHASEPACKAGING CORPORATION**

**(A Development Stage Company)**

## **STATEMENTS OFSHAREHOLDERS’ EQUITY (CONTINUED)**

 
| ** **                                         | ** ** | **Preferred  Stock** | ** ** | **Common  Stock** | ** ** | **Additional  Paid-  in** | ** ** | **Common  Stock** | ** ** | **Accumulated** | ** ** | **Deficit  Accumulated  During the  Development** | ** ** | ** **  | ** ** |
|----------------------------------------------------|------------|----------------------|------------|-------------------|------------|---------------------------|------------|-------------------|------------|-----------------|------------|---------------------------------------------------|------------|-------------|------------|
| ** **                                         | ** ** | **Shares**           | ** ** | **Amount**        | ** ** | **Shares**                | ** ** | **Amount**        | ** ** | **Capital**     | ** ** | **Subscribed**                                    | ** ** | **Deficit** | ** ** | **Stage** | ** ** | **Total** | ** ** |
|                                               |       |                 |       |              |       |                      |       |              |       |            |       |                                              |       |        |       |   |   |   |   |
| Net loss for the year ended December 31, 2006 |       | —               |       | —            |       | —                    |       | —            |       | —          |       | —                                            |       | —      |       | (12,707 | ) | (12,707 | ) |
|                                               |       |                 |       |              |       |                      |       |              |       |            |       |                                              |       |        |       |   |   |   |   |
| Balance at December 31, 2006                  |       | —               |       | —            |       | 8,627,275                 |       | 862,728           |       | 2,757,275       |       | 8,000                                             |       | (3,626,121  | )          | (54,887 | ) | (53,005 | ) |
|                                               |       |                 |       |              |       |                      |       |              |       |            |       |                                              |       |        |       |   |   |   |   |
| Private  placement                                 |       | 13,334               |       | 13,334            |       | 6,667,000                 |       | 666,700           |       | 1,282,324       |       | —                                            |       | —      |       | — |   | 1,962,358 |   |
|                                               |       |                 |       |              |       |                      |       |              |       |            |       |                                              |       |        |       |   |   |   |   |
| Prior  stock subscription                          |       | 68                   |       | 68                |       | 34,000                    |       | 3,400             |       | 6,732           |       | (8,000                                            | )          | —      |       | — |   | 2,200 |   |
|                                               |       |                 |       |              |       |                      |       |              |       |            |       |                                              |       |        |       |   |   |   |   |
| Convertible  debt                                  |       | 416                  |       | 416               |       | 208,000                   |       | 20,800            |       | 41,184          |       | —                                            |       | —      |       | — |   | 62,400 |   |
|                                               |       |                 |       |              |       |                      |       |              |       |            |       |                                              |       |        |       |   |   |   |   |
| Net loss for the year ended December 31, 2007 |       | —               |       | —            |       | —                    |       | —            |       | —          |       | —                                            |       | —      |       | (32,227 | ) | (32,227 | ) |
|                                               |       |                 |       |              |       |                      |       |              |       |            |       |                                              |       |        |       |   |   |   |   |
| Balance at December 31, 2007                  |       | 13,818               |       | 13,818            |       | 15,536,275                |       | 1,553,628         |       | 4,087,515       |       | —                                            |       | (3,626,121  | )          | (87,114 | ) | 1,941,726 |   |
|                                               |       |                 |       |              |       |                      |       |              |       |            |       |                                              |       |        |       |   |   |   |   |
| Preferred  shares issued as dividend               |       | 1,718                |       | 1,718             |       | —                    |       | —            |       | (1,718          | )          | —                                            |       | —      |       | — |   | — |   |
|                                               |       |                 |       |              |       |                      |       |              |       |            |       |                                              |       |        |       |   |   |   |   |
| Cash in lieu of stock                              |       | —               |       | —            |       | —                    |       | —            |       | (3,150          | )          | —                                            |       | —      |       | — |   | (3,150 | ) |
|                                               |       |                 |       |              |       |                      |       |              |       |            |       |                                              |       |        |       |   |   |   |   |
| Net loss for the year ended December 31, 2008 |       | —               |       | —            |       | —                    |       | —            |       | —          |       | —                                            |       | —      |       | (176,191 | ) | (176,191 | ) |
|                                               |       |                 |       |              |       |                      |       |              |       |            |       |                                              |       |        |       |   |   |   |   |
| Balance at December 31, 2008                  |       | 15,536               |       | 15,536            |       | 15,536,275                |       | 1,553,628         |       | 4,082,647       |       | —                                            |       | (3,626,121  | )          | (263,305 | ) | 1,762,385 |   |
|                                               |       |                 |       |              |       |                      |       |              |       |            |       |                                              |       |        |       |   |   |   |   |
| Preferred  shares issued as dividend               |       | 1,542                |       | 1,542             |       | —                    |       | —            |       | (1,542          | )          | —                                            |       | —      |       | — |   | — |   |
|                                               |       |                 |       |              |       |                      |       |              |       |            |       |                                              |       |        |       |   |   |   |   |
| Cash in lieu of stock                              |       | —               |       | —            |       | —                    |       | —            |       | (1,160          | )          | —                                            |       | —      |       | — |   | (1,160 | ) |
|                                               |       |                 |       |              |       |                      |       |              |       |            |       |                                              |       |        |       |   |   |   |   |
| Net loss for the year ended December 31, 2009 |       | —               |       | —            |       | —                    |       | —            |       | —          |       | —                                            |       | —      |       | (92,160 | ) | (92,160 | ) |
|                                               |       |                 |       |              |       |                      |       |              |       |            |       |                                              |       |        |       |   |   |   |   |
| Balance at December 31, 2009                  |       | 17,078               |       | $                 | 17,078     |                      | 15,536,275 |              | $          | 1,553,628       |       | $                                                 | 4,079,945  |        | $          | — |   | $ | (3,626,121 | ) | $ | (355,465 | ) | $ | 1,669,065 |   |
|                                                    |            |                      |            |                   |            |                           |            |                   |            |                 |            |                                                   |            |             |            |  |  |  |  |  |  |  |  |  |  |  |

 

The accompanyingnotes are an integral part of these financial statements.

 

11

----

 

**CHASE PACKAGINGCORPORATION**

**(A Development Stage Company)**

## **STATEMENTS OF CASHFLOWS**

 
| ** **                                                                                                             | ** ** | **Cumulative  During the  Development Stage  (January 1, 1999 to** | ** ** | **For The Year Ended  December 31,** | ** ** |
|------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------|------------|-------------------------------------------|------------|
| ** **                                                                                                             | ** ** | **December 31, 2009)**                                             | ** ** | **2009**                                  | ** ** | **2008** | ** ** |
|                                                                                                                   |       |                                                                    |       |                                      |       |   |   |
| **CASH FLOWS FROM OPERATING ACTIVITIES:**                                                                              |       |                                                                    |       |                                      |       |   |   |
| Net  loss                                                                                                              |       | $                                                                       | (355,465   | )                                         | $          | (92,160 | ) | $ | (176,191 | ) |
| ** **                                                                                                             |       |                                                                    |       |                                      |       |   |   |
| **Change in assets and liabilities:**                                                                                  |       |                                                                    |       |                                      |       |   |   |
| Accounts  payable and accrued expenses                                                                                 |       | (12,670                                                                 | )          | (4,845                                    | )          | (11,253 | ) |
| **Net cash used in operating activities**                                                                              |       | (368,135                                                                | )          | (97,005                                   | )          | (187,444 | ) |
| ** **                                                                                                             |       |                                                                    |       |                                      |       |   |   |
| **CASH FLOWS FROM INVESTING ACTIVITIES**                                                                               |       | —                                                                  |       | —                                    |       | — |   |
| ** **                                                                                                             |       |                                                                    |       |                                      |       |   |   |
| **CASH FLOWS FROM FINANCING ACTIVITIES**                                                                               |       |                                                                    |       |                                      |       |   |   |
| Proceeds  from convertible debt                                                                                        |       | 56,500                                                                  |       | —                                    |       | — |   |
| Proceeds  from private placement/exercise of stock warrants                                                            |       | 5,500                                                                   |       | —                                    |       | — |   |
| Capital  contribution                                                                                                  |       | 8,000                                                                   |       | —                                    |       | — |   |
| Proceeds  from private placement                                                                                       |       | 1,962,358                                                               |       | —                                    |       | — |   |
| Cash  dividends paid on preferred stock                                                                                |       | (4,310                                                                  | )          | (1,160                                    | )          | (3,150 | ) |
| **Net cash provided by (used in) financing  activities**                                                               |       | 2,028,048                                                               |       | (1,160                                    | )          | (3,150 | ) |
| ** **                                                                                                             |       |                                                                    |       |                                      |       |   |   |
| **NET INCREASE (DECREASE) IN CASH AND CASH  EQUIVALENTS**                                                              |       | 1,659,913                                                               |       | (98,165                                   | )          | (190,594 | ) |
|                                                                                                                   |       |                                                                    |       |                                      |       |   |   |
| Cash  and cash equivalents, at beginning of period                                                                     |       | 11,661                                                                  |       | 1,769,739                                 |       | 1,960,333 |   |
|                                                                                                                   |       |                                                                    |       |                                      |       |   |   |
| **CASH AND CASH EQUIVALENTS, END OF PERIOD**                                                                           |       | $                                                                       | 1,671,574  |                                      | $          | 1,671,574 |   | $ | 1,769,739 |   |
|                                                                                                                   |       |                                                                    |       |                                      |       |   |   |
| **SUPPLEMENTAL CASH FLOW INFORMATION:**                                                                                |       |                                                                    |       |                                      |       |   |   |
|                                                                                                                   |       |                                                                    |       |                                      |       |   |   |
| Cash  paid for:                                                                                                        |       |                                                                    |       |                                      |       |   |   |
|                                                                                                                   |       |                                                                    |       |                                      |       |   |   |
| Interest                                                                                                               |       | $                                                                       | —     |                                      | $          | — |   | $ | — |   |
| Income  taxes                                                                                                          |       | $                                                                       | —     |                                      | $          | — |   | $ | — |   |
|                                                                                                                   |       |                                                                    |       |                                      |       |   |   |
| Preferred  stock issued as stock dividend                                                                              |       | $                                                                       | 3,260      |                                      | $          | 1,542 |   | $ | 1,718 |   |
| 416  Private Placement Units were issued in exchange for $56,500 of convertible  notes plus $5,900 of accrued interest |       | $                                                                       | 62,400     |                                      | $          | — |   | $ | — |   |
| 68  Private Placement Units were issued in exchange for $8,000 of stock  subscriptions plus $2,200 of accrued interest |       | $                                                                       | 10,200     |                                      | $          | — |   | $ | — |   |

 

The accompanyingnotes are an integral part of these financial statements.

 

12

----

 

**CHASE PACKAGINGCORPORATION**

**(A Development Stage Company)**

## **NOTES TO FINANCIALSTATEMENTS**

**DECEMBER31, 2009 AND 2008**

 

**NOTE   1   -****         ****BASIS OF PRESENTATION:**

 

ChasePackaging Corporation (“the Company”), a Texas Corporation, previouslymanufactured woven paper mesh for industrial applications, polypropylene meshfabric bags for agricultural use and distributed agricultural packagingmanufactured by other companies.

 

Since January 1,1999, the Board of Directors of the Company has been devoting its efforts toestablishing a new business and, accordingly, the Company is being treated as adevelopment stage company in accordance with FASB’s ASC 915.

 

Management’splans for the Company include securing a merger or acquisition, raisingadditional capital and other strategies designed to optimize shareholder value.However, no assurance can be given that management will be successful in itsefforts. The failure to achieve these plans will have a material adverse effecton the Company’s financial position, results of operations and ability tocontinue as a going concern.

 

#### **NOTE   2   -**          SUMMARY OFSIGNIFICANT ACCOUNTING POLICIES:

#### ** **

***Use of Estimates:***

 

Thepreparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to makeestimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of revenues and expensesduring the reporting period. Actual results could differ from those estimates.

 

***Cash and Cash Equivalents***

 

TheCompany considers all highly liquid investments that are readily convertibleinto cash with a remaining maturity of three months or less at the time ofacquisition to be cash equivalents. The Company maintains its cash and cashequivalents balances with high credit quality financial institutions.  Asof December 31, 2009, and 2008 the Company had  cash and cashequivalents held in financial institutions in excess of Federal DepositInsurance Corporation limits in the amount of  approximately $1,172,000and $1,520,000, respectively.

 

TheCompany’s cash equivalents include investments in U.S. Treasury Bills. Becauseof the short maturity nature of these financial instruments, which typicallymature in approximately 28 days, they are held to maturity and valued atamortized cost, which approximates fair value.  The aggregate fair valueof investments in U.S. Treasury Bills classified as cash equivalents at December 31,2009 and 2008 was $1,033,000 and $1,132,000, respectively.

 

***Income Taxes***

 

Theasset and liability method is used in accounting for income taxes.  Underthis method, deferred tax assets and liabilities are recognized for operatingloss and tax credit carry forwards and for the future tax consequencesattributable to differences between the financial statement carrying amounts ofexisting assets and liabilities and their respective tax basis.  Deferredtax assets and liabilities are measured assuming enacted tax rates expected toapply to taxable income in the years in which those temporary differences areexpected to be recovered or settled.  The effect on deferred tax assetsand liabilities of a change in tax rates is recognized in the results ofoperations in the period that includes the enactment date.  A valuationallowance is recorded to reduce the carrying amounts of deferred tax assetsunless it is more likely than not that such assets will be realized.

 

13

----

 

**CHASE PACKAGINGCORPORATION**

**(A Development Stage Company)**

## **NOTES TO FINANCIALSTATEMENTS**

**DECEMBER31, 2009 AND 2008**

 

**NOTE   2   -****         ****SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued):**

 

***Income Taxes (continued):***

 

On January 1,2007, the Company adopted Financial Accounting Standards Board (FASB)Interpretation of, “Accounting for Uncertainty in Income Taxes.”  Therewas no impact on the Company’s financial position, results of operations orcash flows at December 31, 2007 and for the year then ended as a result ofimplementing this guidance. At the adoption date of January 1, 2007 and atDecember 31, 2009 and 2008, the Company evaluated its tax positions anddid not have any unrecognized tax benefits. The Company’s practice is torecognize interest and/or penalties related to income tax matters in income taxexpense. The Company currently has no federal or state tax examinations inprogress.

 

***Basic and Diluted Net Loss Per Share:***

 

Basicloss per common share is computed by dividing the net loss by theweighted-average number of common shares outstanding.  Diluted lossper share is computed by dividing the net loss by the sum of theweighted-average number of common shares outstanding plus the dilutive effectof shares issuable through the exercise of Common Stock equivalents.

 

Wehave excluded 23,987,000 and 22,445,000 Common Stock equivalents (warrants)from the calculation of diluted loss per share for the years ended December 31,2009 and 2008, respectively, which, if included, would have an antidilutiveeffect.

 

***Recently Issued Accounting PronouncementsAffecting the Company:***

 

*Codification*

 

In July 2009,the FASB’s Accounting Standards Codification (ASC) became the single officialsource of authoritative, nongovernmental generally accepted accountingprinciples (“US-GAAP” or “GAAP”) in the United States. This guidance iscontained in ASC Topic 105 “Generally Accepted Accounting Principles.” Thehistorical GAAP hierarchy was eliminated and the ASC became the only level ofauthoritative GAAP, other than guidance issued by the Securities and ExchangeCommission. This guidance is effective for interim and annual periods endingafter September 15, 2009. The Company adopted the provisions of thisguidance as of September 30, 2009. The Company’s accounting policies werenot affected by the conversion to the ASC. However, references to specificaccounting standards have been changed to refer to the appropriate section ofthe ASC.

 

*Fair Value Measurements*

 

In September 2006,the FASB issued guidance that defines fair value, establishes a framework formeasuring fair value and expands disclosures about fair value measurements.This guidance is contained in ASC Topic 820 “Fair Value Measurements andDisclosures.” This guidance does not require any new fair value measurements,but applies under other accounting pronouncements that require or permit fairvalue measurements. The effective date of this guidance for financial assetsand liabilities that are recognized or disclosed at fair value on a recurringbasis was January 1, 2008, and the Company did adopt the provisions ofthis guidance at that time as it related to financial assets and liabilitiesrecognized or disclosed at fair value on a recurring basis. Effective January 1,2009, pursuant to this guidance, the Company adopted the provisions of thisguidance as it relates to non financial assets and liabilities that are notrecognized or disclosed at fair value on a recurring basis. The adoption ofthis guidance had no impact on the Company’s financial statements.

 

In April 2009,the FASB issued guidance that extends the disclosure requirements regarding thefair value of financial instruments to interim financial statements of publiclytraded companies.

 

14

----

 

**CHASE PACKAGINGCORPORATION**

**(A Development Stage Company)**

## **NOTES TO FINANCIALSTATEMENTS**

**DECEMBER31, 2009 AND 2008**

 

**NOTE   2   -        SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (continued):**

 

***Recently Issued Accounting PronouncementAffecting the Company (continued):***

 

Thisguidance is primarily contained in ASC Topic 825 “Financial Instruments” andASC Topic 270 “Interim Reporting.” This guidance is effective for interimperiods ending after June 15, 2009. The Company adopted the provisions ofthis guidance as of June 30, 2009. The adoption of this guidance had noimpact on the Company’s financial statements.

 

*Subsequent Events*

 

In May 2009, the FASB issued guidance that isintended to establish general standards of accounting for and disclosure ofevents that occur after the balance sheet date but before the financialstatements are issued or are available to be issued. This guidance is containedin ASC Topic 855 “Subsequent Events.” It requires the disclosure of the datethrough which an entity has evaluated subsequent events and the basis for thatdate. This guidance is effective for interim and annual periods ending after June 15,2009. The Company adopted the provisions of this guidance as of June 30,2009.

 

In February 2010, FASB revised the authoritativeguidance related to subsequent events. The Company is required to evaluatesubsequent events through the date the financial statements are issued. TheCompany is not required to disclose the date through which subsequent eventshave been evaluated. This guidance was effective upon issuance for the Companyfor the period ended December 31, 2009. Since this guidance is notintended to significantly change the current practice of reporting subsequentevents, it did not have an impact on the Company’s results of operations, cashflows or financial positions.

 

*Consolidation of Variable Interest Entities*

 

In June 2009,an update was made to “Consolidation — Consolidation of Variable InterestEntities.” Among other things, the update replaces the calculation for determiningwhich entities, if any, have a controlling financial interest in a variableinterest entity (VIE) from a quantitative based risks and rewards calculation,to a qualitative approach that focuses on identifying which entities have thepower to direct the activities that most significantly impact the VIE’seconomic performance and the obligation to absorb losses of the VIE or theright to receive benefits from the VIE. The update also requires ongoingassessments as to whether an entity is the primary beneficiary of a VIE(previously, reconsideration was only required upon the occurrence of specificevents), modifies the presentation of consolidated VIE assets and liabilities,and requires additional disclosures about a Company’s involvement in VIEs. Thisupdate became effective for the Company on January 1, 2010. The Company isevaluating the impact that this guidance will have on its financial statements,if any.

 

*Business Combinations*

 

In December 2007,the FASB revised the authoritative guidance for business combinations.Transaction costs are now required to be expensed as incurred and adjustmentsto the acquired entity’s deferred tax assets and uncertain tax positionbalances occurring outside the measurement period are recorded as a componentof income tax expense, rather than goodwill, among other changes.

 

In April 2009,the FASB revised the authoritative guidance related to the initial recognitionand measurement, subsequent measurement and accounting, and disclosure ofassets and liabilities arising from contingencies in a business combination.Generally, assets acquired and liabilities assumed in a business combinationthat arise from contingencies must be recognized at fair value at theacquisition date. This guidance was effective for the Company as of January 1,2009. As this guidance is applied prospectively to business combinations withan acquisition date on or after the

 

15

----

** **

**CHASE PACKAGINGCORPORATION**

**(A Development Stage Company)**

## **NOTES TO FINANCIALSTATEMENTS**

**DECEMBER31, 2009 AND 2008**

** **

**NOTE   2   -        SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (continued):**

 

***Recently Issued Accounting PronouncementAffecting the Company (continued):***

 

datethe guidance became effective, the impact to the Company cannot be determineduntil the transactions occur.

 

**NOTE   3   -        INCOME TAXES:**

 

Nocurrent provision for Federal income taxes was required for the years ended December 31,2009 and 2008, due to the Company’s operating losses.  At December 31,2009 and 2008, the Company has unused net operating loss carry-forwards ofapproximately $3,600,000 and $3,500,000 which expire at various dates through2029.  Most of this amount is subject to annual limitations undercertain provisions of the Internal Revenue Code related to “changes inownership.”

 

As of December 31,2009 and 2008, the deferred tax assets related to the aforementionedcarry-forwards have been fully offset by valuation allowances, since it is morelikely than not that significant utilization of such amounts will not occur inthe foreseeable future.

 
| ** **                                                | ** ** | **2009**       | ** **    | **2008**       | ** ** |
|-----------------------------------------------------------|------------|----------------|---------------|----------------|------------|
| Deferred  tax assets and valuation allowances consist of: | ** ** | ** **     | ** **    | ** **     | ** ** |
|                                                      | ** ** | ** **     | ** **    | ** **     | ** ** |
| Deferred tax assets:                                      | ** ** | ** **     | ** **    | ** **     | ** ** |
| Net  operating loss carry forwards                        | ** ** | **$**          | **1,242,000** | ** **     | **$**      | **1,205,000** | ** ** |
|                                                      | ** ** | ** **     | ** **    | ** **     | ** ** |
| Less  valuation allowance                                 | ** ** | **(1,242,000** | **)**         | **(1,205,000** | **)**      |
| Net  deferred tax assets                                  | ** ** | **$**          | **—**    | ** **     | **$**      | **—** | ** ** |

 

We file income tax returns in the U.S. Federal andTexas state jurisdictions. Tax years for fiscal 2006 through 2009 are open andpotentially subject to examination by the Federal and Texas state taxingauthorities.

 

**NOTE   4   -        2007 PRIVATE PLACEMENT UNITS (“UNITS”):**

 

On September 7,2007, the Company completed a private placement, pursuant to which 13,334 units(the “Units”) were sold at a per Unit cash purchase price of $150, for a totalsubscribed amount of $2,000,100. Each Unit consists of: (1) one share of Series A10% convertible preferred stock, par value $1.00, stated value $100 (the “PreferredStock”); (2) 500 shares of the Company’s common stock, par value $0.10(the “Common Stock”); and (3) 500 warrants (the “Warrants”) exercisableinto the Company’s Common Stock on a one-for-one basis.

 

Eachwarrant contained in a Unit has a term of five years during which such warrantmay be exercised, at $0.15 per share, into one share of Common Stock. A totalof 6,605 Units were purchased by related parties, including significantshareholders. The exercise price of the Warrants is subject to adjustment toreflect recapitalizations, stock dividends, mergers, stock splits, and similarevents that would otherwise dilute the relative number of shares of CommonStock into which the Warrants may be exercised.

 

Eachshare of Preferred Stock contained in a Unit has a stated value of $100 and isconvertible at any time into Common Stock at a rate of $0.10 per share. Theconversion price of the Preferred Stock is subject to adjustment to reflectrecapitalizations, stock dividends, mergers, stock splits, and similar eventsthat would otherwise dilute the relative number of shares of Common Stock intowhich the Preferred Stock may be converted.

 

16

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**CHASE PACKAGINGCORPORATION**

**(A Development Stage Company)**

## **NOTES TO FINANCIALSTATEMENTS**

**DECEMBER31, 2009 AND 2008**

 

**NOTE   4   -        2007 PRIVATE PLACEMENT UNITS (“UNIT”)(continued):**

 

Thereare 4,000,000 shares of Preferred Stock currently authorized for issuance. Atthe discretion of the Company’s Board of Directors, the Company may pay to theholders of the Preferred Stock a semi-annual dividend of ten percent payable incash or in kind (i.e., in additional shares of Preferred Stock) or anycombination thereof. The holder of each share of Preferred Stock will have onevote for each underlying share of Common Stock as if such Preferred Stock hadbeen converted. At any time prior to conversion, the Company’s Board ofDirectors may redeem any portion or all of the Preferred Stock at a price of$100 per share of Preferred Stock. Each share of Preferred Stock will have aliquidation value of $100 per share. At any time after August 2, 2011, theholders of 66 2/3% or more of the shares of Preferred Stock then outstandingmay request the liquidation of their Preferred Stock. In the event that, at thetime of such requested liquidation, the Company’s cash funds (in excess of a $50,000reserve fund) then available to effect such liquidation are inadequate for suchpurpose, the requested liquidation shall take place (on a pro-rata basis) onlyto the extent such excess cash funds are available for such purpose. In theevent of a merger transaction approved by the holders of the Common Stock, theholders of the Preferred Stock will have the right to a cash payment of $100per share in connection with such merger, or the Preferred Stock will beautomatically converted at the then applicable conversion rate.  There was no beneficial conversion featurerecorded as the Common Stock was selling for less than $0.10 per share at thetime of the closing which approximates fair value.

 

Legaland professional fees of approximately $38,000 were incurred in connection withthis private placement transaction resulting in net proceeds of approximately$1,962,000.

 

**NOTE    5   -       DIVIDENDS:**

 

OnMay 8, 2008, the Company announced that the Board of Directors haddeclared a five percent stock dividend on its outstanding Series A 10%Convertible Preferred Stock for the period commencing September 7,2007.  Shareholders of record as of May 23,2008 received the stock dividend for each share of Series A PreferredStock owned on that date, payable May 30, 2008.  As of May 8, 2008, the Company had13,818 shares of Series A Preferred Stock outstanding; the total dividendpaid consisted of 994 shares of Series A Preferred Stock with a fair valueof $99,400 and $1,490 cash in lieu of fractional shares.  Due to the absence of Retained Earnings, thecash and $994 par value of Preferred Stock dividend totaling $2,484 was chargedagainst Additional Paid-in Capital.

 

OnNovember 7, 2008, the Company announced that the Board of Directors haddeclared a five percent stock dividend on its outstanding Series A 10%Convertible Preferred Stock. Shareholders of record as of November 17,2008 received the stock dividend for each share of Series A PreferredStock owned on that date, payable December 1, 2008.  As of November 6, 2008, the Company had14,812 shares of Series A Preferred Stock outstanding; the total dividendpaid consisted of 724 shares of Series A Preferred Stock with a fair valueof $72,400 and $1,660 cash in lieu of fractional shares.  Due to the absence of Retained Earnings, the$1,660 of cash and $724 par value of Preferred Stock dividend totaling $2,384was charged against Additional Paid-in Capital.

 

OnNovember 2, 2009, the Company announced that the Board of Directors haddeclared a ten percent stock dividend on its outstanding Series A 10%Convertible Preferred Stock. Shareholders of record as of November 16, 2009 received the stockdividend for each share of Series A Preferred Stock owned on that date,payable December 1, 2009.   As of November 2,2009, the Company had 15,536 shares of Preferred Stock outstanding; the totaldividend paid consisted of 1,542 shares of Series A Preferred Stock with afair value of $154,200 and $1,160 cash in lieu of fractional shares.  Due to the absence of Retained Earnings, the$1,160 of cash and $1,542 par value of Preferred Stock dividend totaling $2,702was charged against Additional Paid-in Capital.

 

17

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**CHASE PACKAGINGCORPORATION**

**(A Development Stage Company)**

## **NOTES TO FINANCIALSTATEMENTS**

**DECEMBER31, 2009 AND 2008**

 

**NOTE   6   -        SHAREHOLDERS’ EQUITY:**

 

TheCompany’s 2008 Stock Awards Plan (the “2008 Plan”) was approved at the Company’sannual meeting of shareholders held on June 3, 2008.  The 2008 Planbecame effective April 9, 2008 and will terminate on April 8,2018.  Subject to certain adjustments, the number of shares of CommonStock that may be issued pursuant to awards under the 2008 Plan is 2,000,000shares.  A maximum of 80,000 shares may be granted in any one year in anyform to any one participant, of which a maximum of (i) 50,000 shares maybe granted to a participant in the form of stock options and (ii) 30,000shares may be granted to a participant in the form of Common Stock orrestricted stock.  The 2008 Plan will be administered by a committee ofthe Board of Directors.  Employees, including any employee who is also adirector or an officer, consultants, and outside directors of the Company areeligible to participate in the 2008 Plan. As of December 31, 2009 no optionshad been issued under the 2008 Plan.

 

On June 3,2008, the Company adopted an amendment to its Articles of Incorporation andincreased the number of authorized shares of the Common Stock from 25,000,000to 200,000,000.

 

**NOTE   7   -        FAIR VALUE MEASUREMENTS:**

 

The Company adopted FASB’s ASC 820, “Fair ValueMeasurements,” as it applies to its financial instruments, and FASB’s ASC 820, “TheFair Value Option for Financial Assets and Financial Liabilities” — includingan amendment which defines fair value, outlines a framework for measuring fairvalue, and details the required disclosures about fair value measurements,which permits companies to irrevocably choose to measure certain financialinstruments and other items at fair value. It also establishes presentation anddisclosure requirements designed to facilitate comparison between entities thatchoose different measurement attributes for similar types of assets andliabilities.

 

Under ASC 820, fair value is defined as the price thatwould be received to sell an asset or paid to transfer a liability in anorderly transaction between market participants at the measurement date in theprincipal or most advantageous market. ASC 820 establishes a hierarchy indetermining the fair value of an asset or liability. The fair value hierarchyhas three levels of inputs, both observable and unobservable. ASC 820 requiresthe utilization of the lowest possible level of input to determine fair value.Level 1 inputs include quoted market prices in an active market for identicalassets or liabilities. Level 2 inputs are market data, other than Level 1, thatare observable either directly or indirectly. Level 2 inputs include quotedmarket prices for similar assets or liabilities, quoted market prices in aninactive market, and other observable information that can be corroborated bymarket data. Level 3 inputs are unobservable and corroborated by little or nomarket data.

 

Except for those assets and liabilities which arerequired by authoritative accounting guidance to be recorded at fair value inthe Company’s Balance Sheets, the Company has elected not to record any otherassets or liabilities at fair value, as permitted by ASC 820. No eventsoccurred during the year ended December 31, 2009 which would requireadjustment to the recognized balances of assets or liabilities which arerecorded at fair value on a nonrecurring basis.

 

The Company determines fair values for its investmentassets as follows:

 

Cash equivalents at fair value — the Company’s cashequivalents, at fair value, consists of money market funds and treasury bills —marked to market. The Company’s money market funds and treasury bills areclassified within Level 1 of the fair value hierarchy as they are valued usingquoted market prices from an exchange.

 

18

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**CHASE PACKAGINGCORPORATION**

**(A Development Stage Company)**

## **NOTES TO FINANCIALSTATEMENTS**

**DECEMBER31, 2009 AND 2008**

 

**NOTE   7   -        FAIR VALUE MEASUREMENTS (continued):**

 

The following tables provide information on thoseassets and liabilities measured at fair value on a recurring basis as of December 31,2009 and 2008, respectively.

** **
| ** **          | ** ** | **Carrying Amount****Amount****In********Balance Sheet********December 31,** | ** ** | **Fair Value********December 31,** | ** ** | **Fair Value Measurement Using** | ** ** |
|---------------------|------------|-----------------------------------------------------------------------------------|------------|-----------------------------------------|------------|----------------------------------|------------|
| ** **          | ** ** | **2009**                                                                          | ** ** | **2009**                                | ** ** | **Level 1**                      | ** ** | **Level 2** | ** ** | **Level 3** | ** ** |
| Assets:             |       |                                                                              |       |                                    |       |                             |       |   |   |   |   |
|                |       |                                                                              |       |                                    |       |                             |       |   |   |   |   |
| Money  Market Funds |       | $                                                                                 | 633,000    |                                    | $          | 633,000                          |       | $ | 633,000 |   | $ | — |   | $ | — |   |
| Treasury  Bills     |       | $                                                                                 | 1,033,000  |                                    | $          | 1,033,000                        |       | $ | 1,033,000 |   | $ | — |   | $ | — |   |

 
| ** **          | ** ** | **Carrying Amount****Amount****In********Balance Sheet********December 31,** | ** ** | **Fair Value********December 31,** | ** ** | **Fair Value Measurement Using** | ** ** |
|---------------------|------------|-----------------------------------------------------------------------------------|------------|-----------------------------------------|------------|----------------------------------|------------|
| ** **          | ** ** | **2008**                                                                          | ** ** | **2008**                                | ** ** | **Level 1**                      | ** ** | **Level 2** | ** ** | **Level 3** | ** ** |
| Assets:             |       |                                                                              |       |                                    |       |                             |       |   |   |   |   |
|                |       |                                                                              |       |                                    |       |                             |       |   |   |   |   |
| Money  Market Funds |       | $                                                                                 | 631,000    |                                    | $          | 631,000                          |       | $ | 631,000 |   | $ | — |   | $ | — |   |
| Treasury  Bills     |       | $                                                                                 | 1,132,000  |                                    | $          | 1,132,000                        |       | $ | 1,132,000 |   | $ | — |   | $ | — |   |

 

**NOTE 8   -          COMMITMENTSAND CONTINGENCIES:**

 

CommencingNovember 1, 2007, the Company’s Board of Directors agreed to pay theCompany’s Chief Financial Officer an annual salary of $17,000.  No other officers or directors of the Companyreceive compensation other than reimbursement of out-of-pocket expensesincurred in connection with Company business and development.

 

19

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

 

None.

 

**ITEM 9A(T). CONTROLS ANDPROCEDURES.**

 

(a)           Evaluation of Disclosure Controls andProcedures.

 

Under thesupervision and with the participation of our management, including ourprincipal executive officer and principal financial and accounting officer, weconducted an evaluation of the effectiveness of the design and operation of ourdisclosure controls and procedures, as defined in Rules 13a-15(e) and15d-15(e) under the Exchange Act, as of the end of the period covered bythis report.  Based on this evaluation,our principal executive officer and principal financial and accounting officerconcluded that, as of the period covered by this report, our disclosurecontrols and procedures were effective to provide reasonable assurance that theinformation required to be included in our Securities and Exchange Commission (“SEC”)reports is recorded, processed, summarized, and reported within the timeperiods specified in SEC rules and forms.

 

(b)           Changes in Internal Controls overFinancial Reporting.

 

In connection withthe evaluation required by paragraph (d) of Rule 13a-15 under theExchange Act, there was no change identified in our internal control overfinancial reporting that occurred during the last fiscal quarter that hasmaterially affected, or is reasonably likely to materially affect, our internalcontrol over financial reporting.

 

**Management’sAnnual Report on Internal Control over Financial Reporting**

 

Our management isresponsible for establishing and maintaining adequate internal control overfinancial reporting. Internal control over financial reporting is a processdesigned by, or under the supervision of, the principal executive officer andprincipal financial and accounting officer and effected by our Board ofDirectors, management and other personnel, to provide reasonable assuranceregarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generallyaccepted accounting principles.

 

Our evaluation ofinternal control over financial reporting includes using the COSO framework, anintegrated framework for the evaluation of internal controls issued by theCommittee of Sponsoring Organizations of the Treadway Commission, to identifythe risks and control objectives related to the evaluation of our controlenvironment.

 

Our management has concluded that our internal control over financialreporting was effective as of December 31, 2009.

 

This annual report does not include an attestation report of the Company’sregistered public accounting firm regarding internal control over financialreporting.  Management’s report was notsubject to attestation by the Company’s registered public accounting firmpursuant to temporary rules of the SEC that permit the Company to provideonly management’s report in this annual report.

 

**ITEM9B.               OTHER INFORMATION.**

 

None.

 

20

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**PART III**

 
| **ITEM  10.** | **DIRECTORS,  EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.** |
|---------------|--------------------------------------------------------------|

** **

Theinformation required by Item 10 of Form 10-K is hereby incorporated byreference from the Company’s definitive proxy statement, which will be filedpursuant to Regulation 14A within 120 days after the Company’s year end for theyear covered by this report.

 
| **ITEM 11.** | **EXECUTIVE COMPENSATION.** |
|--------------|-----------------------------|

 

Theinformation required by Item 11 of Form 10-K is hereby incorporated byreference from the Company’s definitive proxy statement, which will be filedpursuant to Regulation 14A within 120 days after the Company’s year end for theyear covered by this report.

 
| **ITEM  12.** | **SECURITY  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER  MATTERS.** |
|---------------|-------------------------------------------------------------------------------------------------------|

** **

Theinformation required by Item 12 of Form 10-K is hereby incorporated byreference from the Company’s definitive proxy statement, which will be filed pursuantto Regulation 14A within 120 days after the Company’s year end for the yearcovered by this report.

 
| **ITEM  13.** | **CERTAIN  RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.** |
|---------------|---------------------------------------------------------------------------------|

** **

Theinformation required by Item 13 of Form 10-K is hereby incorporated byreference from the Company’s definitive proxy statement, which will be filedpursuant to Regulation 14A within 120 days after the Company’s year end for theyear covered by this report.

 
| **ITEM 14.** | **PRINCIPAL ACCOUNTING FEES AND  SERVICES** |
|--------------|---------------------------------------------|

 

The informationrequired by Item 14 of Form 10-K is hereby incorporated by reference fromthe Company’s definitive proxy statement, which will be filed pursuant toRegulation 14A within 120 days after the Company’s year end for the yearcovered by this report.

 

**PART IV**

** **
| **ITEM  15.** | **EXHIBITS  AND FINANCIAL STATEMENT SCHEDULES.** |
|---------------|--------------------------------------------------|

** **

(a)          The following documents are filed as a part of thisreport:

 

(1)   Financial Statements included in Item 8 aboveare filed as part of this annual report.

 

(2)   Financial Statement Schedules included inItem 8 herein:

 

All schedules forwhich provision is made in the applicable accounting regulations of theSecurities and Exchange Commission are not required under the relatedinstructions or are inapplicable and therefore, have been omitted.

 

(3)          Exhibits:  Theinformation required by this Item 15(a)(3) is set forth in the Index toExhibits accompanying this Annual Report on Form 10-K.

 

21

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| **Number** | ** ** | **Description**                                                                                                                                                                                                                                                                                                                                                                             |
|------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |       |                                                                                                                                                                                                                                                                                                                                                                                        |
| 3.1        |       | Articles of  Incorporation, as amended, of the Company filed as Exhibit 3.1 to the  Company’s Form 10-SB, as amended, dated October 24, 1996, filed  with the Securities and Exchange Commission and incorporated herein by  reference.                                                                                                                                 |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                        |
| 3.2        |       | Articles of Amendment  to the Articles of Incorporation of the Company filed as Exhibit 3.1 to  the Company’s Form 8-K filed with the Securities and Exchange Commission  on June 9, 2008, and incorporated herein by reference.                                                                                                                                        |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                        |
| 3.3        |       | Amended and Restated  Bylaws of the Company dated March 28, 2008, filed as Exhibit 3.1 to  the Company’s Form 8-K filed with the Securities and Exchange Commission  on April 3, 2008, and incorporated herein by reference*.*                                                                                                                                     |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.1        |       | Form of  Registration Rights Amendment, dated as of September 7, 2007, by and  among the Company and certain purchasers named therein, filed as  Exhibit 4.1 to the Company’s Form 10-QSB/A for the quarterly period  ended September 30, 2007, filed with the Securities and Exchange  Commission on May 5, 2008, and incorporated herein by reference. |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.2        |       | Form of Amendment  Number One to Registration Rights Agreement, dated as of April 30, 2008,  by and among the Company and certain purchasers named therein, filed as  Exhibit 4.1 to the Company’s Form 8-K filed with the Securities and  Exchange Commission on May 5, 2008, and incorporated herein by  reference.                                         |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.3        |       | Form of Securities  Purchase and Subscription Agreement, dated as of September 7, 2007, by  and among the Company and certain purchasers named therein, filed as  Exhibit 10.1 to the Company’s Form 8-K filed with the Securities  and Exchange Commission on September 11, 2007, and incorporated herein  by reference.                                     |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.4        |       | Statement of Resolution  Establishing Series A 10% Convertible Preferred Stock of the Company,  filed as Exhibit 10.3 to the Company’s Form 8-K filed with the  Securities and Exchange Commission on September 11, 2007, and  incorporated herein by reference.                                                                                                   |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.5        |       | Form of Warrant  Agreement and Warrant Certificate dated as of September 7, 2007, filed  as Exhibit 10.4 to the Company’s Form 8-K filed with the Securities  and Exchange Commission on September 11, 2007, and incorporated herein  by reference.                                                                                                           |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.6        |       | Statement of Resolution  Regarding Series of Preferred Stock of the Company dated  November 9, 2007, filed as Exhibit 4.6 to the Company’s  Form 10-Q for the quarterly period ended June 30, 2008, filed with  the Securities and Exchange Commission on August 13, 2008, and  incorporated herein by reference.                                        |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.7        |       | Statement of Resolution  Regarding Series of Preferred Stock of the Company, filed as  Exhibit 4.1 to the Company’s Form 8-K filed with the Securities and  Exchange Commission on May 21, 2008, and incorporated herein by  reference.                                                                                                                            |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                        |
| 31.1*      |       | Certification of the  Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley  Act of 2002.                                                                                                                                                                                                                                                                              |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                        |
| 31.2*      |       | Certification of the  Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley  Act of 2002.                                                                                                                                                                                                                                                                              |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                        |
| 32.1*      |       | Certification of the  Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                          |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                        |
| 32.2*      |       | Certification of the  Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                          |

 

----

*filed herewith

 

22

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** **

**SIGNATURES**

 

Pursuant to therequirements of Section 13 or 15(d) of the Securities Exchange Act of1934, the registrant has duly caused this report to be signed on its behalf bythe undersigned, thereunto duly authorized.

 
|                       | **CHASE PACKAGING CORPORATION** |
|----------------------------|---------------------------------|
|                       |                            |   |   |
|                       |                            |   |   |
| Date: March 30,  2010 |                            | By: | /s/ Allen T. McInnes |
|                       |                            |   | Allen T. McInnes |
|                       |                            |   | Chairman of the Board,  President and Treasurer |

 

Pursuant to therequirements of the Securities Exchange Act of 1934, this report has beensigned below by the following persons on behalf of the registrant and in thecapacities and on the dates indicated.

 

 
| Date: March 30,  2010 | By:    | /s/ Allen T. McInnes                             |
|----------------------------|--------|--------------------------------------------------|
|                       |   | Allen T. McInnes                                 |
|                       |   | Chairman of the Board,  President and Treasurer  |
|                       |   |                                             |
|                       |   |                                             |
| Date: March 30,  2010 | By:    | /s/ Ann C.W. Green                               |
|                       |   | Ann C. W. Green                                  |
|                       |   | Chief Financial Officer  and Assistant Secretary |
|                       |   |                                             |
|                       |   |                                             |
| Date: March 30,  2010 | By:    | /s/ Herbert M. Gardner                           |
|                       |   | Herbert M. Gardner                               |
|                       |   | Vice President and  Director                     |
|                       |   |                                             |
|                       |   |                                             |
| Date: March 30,  2010 | By:    | /s/ William J. Barrett                           |
|                       |   | William J. Barrett                               |
|                       |   | Secretary and Director                           |
|                       |   |                                             |
|                       |   |                                             |
| Date: March 30,  2010 | By:    | /s/ Edward L. Flynn                              |
|                       |   | Edward L. Flynn                                  |
|                       |   | Director                                         |
|                       |   |                                             |
|                       |   |                                             |
| Date: March 30,  2010 | By:    | /s/ Wayne Whitener                               |
|                       |   | Wayne Whitener                                   |
|                       |   | Director                                         |

 

23

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