SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





**FORM
        10-KSB/A**





ANNUAL
      REPORT UNDER SECTION 13 OR 15(d)


OF
      THE
      SECURITIES EXCHANGE ACT OF 1934





For
                the fiscal year ended December 31, 2006
            
            Commission
                File Number 0-21609





**CHASE
      PACKAGING CORPORATION**


(Exact
      name of registrant as specified in its charter)





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





636
                River RoadFair
                Haven, NJ
            
            07704(Address
                of principal executive offices)
            
            (Zip
                Code)





Registrant's
      telephone number, including area code: 732-741-1500


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





Securities
      registered pursuant to Section 12(g) of the Act: Common
      Stock, $.10 par value (Title
      of Class)





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





Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-B is not contained herein, and will not be contained, to the best
      of registrants’ knowledge, in definitive proxy or information statement
      incorporated by reference in Part III of this Form 10-KSB or any amendment
      to
      this Form 10-KSB. o





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





Issuers
        revenues for the most recent fiscal year - $
        -0-


The
      aggregate market value of voting stock held by non-affiliates of the registrant
      as of December 31, 2006 was $ N/A





Indicate
      by check mark whether the registrant has filed all documents and reports
      required by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934
      subsequent to the distribution of securities under a plan confirmed by a court.
      YesxNo o




As
      of
      December 31, 2006, the registrant had outstanding 8,627,275 shares of Common
      Stock ($.10 par value)








**PART
      I**





**ITEM
      1. DESCRIPTION OF BUSINESS.**





Chase
      Packaging Corporation ("Chase" or the "Company"), is a Texas corporation which
      was engaged in the specialty packaging business, primarily as a supplier of
      packaging products to the agricultural industry. During 1997, the Company
      commenced an orderly liquidation of its assets as described below.




**History**





Chase
      Packaging Corporation (the "Company") was established in July of 1993 as a
      wholly owned subsidiary of TGC Industries, Inc. ("TGC") of Plano, Texas. On
      July
      30, 1993, the Company purchased certain assets of Union Camp Corporation's
      Chase
      Packaging division ("Chase Bag"), for a purchase price of approximately $6.14
      million. The assets purchased included substantially all of the business of
      weaving and constructing Saxolin ® paper
      mesh and polypropylene plastic mesh bagging material for agricultural and
      industrial applications and substantially all of the properties related to
      Chase
      Bag. The properties acquired by Chase consisted of Union Camp's plant facilities
      located in Portland, Oregon, and Idaho Falls, Idaho, and all machinery,
      equipment, and inventories connected with these facilities.





The
      Company had experienced losses for the past years, and the Company's secured
      lender decided not to renew the Company's operating line of credit. The
      Company's Board of Directors therefore determined that it was in the best
      interest of the Company and all of its creditors to liquidate in an orderly
      fashion.





Effective
      July 21, 1997, the Company sold its operations at Idaho Falls, Idaho, to
      Lockwood Packing Corporation ("Lockwood"), as a going concern. The assets sold
      included substantially all of the Company's equipment, furniture, fixtures,
      and
      other assets located in the Idaho Falls, Idaho facility for a total of $75,000.
      In addition, the Company sold inventory from the Idaho Falls operation to
      Lockwood for $255,000. The proceeds from these sales were used to pay down
      the
      Company's loan balance with its bank.





On
      July
      25, 1997, the Company notified its creditors by mail that the Company would
      begin an orderly liquidation of all of its remaining assets outside of a formal
      bankruptcy or receivership proceeding in a manner which is intended to maximize
      the asset values. The Company retained the firm of Edward Hostmann, Inc. to
      assist the Company in such liquidation.





The
      Board
      of Directors is currently devoting its efforts to establishing a new business
      and accordingly, the Company is being treated as a development stage company,
      in
      accordance with Statement of Financial Accounting Standards No. 7,
      effective January 1, 1999.








**ITEM
      2. DESCRIPTION OF PROPERTY.**





None.








**ITEM
      3. LEGAL PROCEEDINGS.**





None.


2


**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
      HOLDERS.**





No
      matters were submitted by the Company during the fourth quarter of the fiscal
      year ended December 31, 2006 to a vote of the Company's security holders,
      through the solicitation of proxies or otherwise.








**PART
      II**





**ITEM
      5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS.**





The
      Company's Common Stock was eligible to commence trading under the symbol "CPKA"
      on March 10, 1997 and the first trade occurred on March 10, 1997, at $.04 per
      share. The number of shareholders of record as of December 31, 2006 was not
      known. As a result of the events detailed above, the Company’s securities trade
      on an extremely limited basis.







**ITEM
      6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION:**





The
      Company has experienced cash losses for the past years in spite of numerous
      infusions of working capital and an aggressive program of inventory and expense
      reduction. During 1997, the Board of Directors determined that an orderly
      liquidation was in the best interest of the Company and all of its creditors
      and
      retained the firm of Edward Hostmann, Inc. to assist the Company in such
      liquidation. Accordingly, the Company ceased all operations with the close
      of
      business on June 30, 1997.





As
      part
      of the liquidation process, effective July 21, 1997, the Company sold most
      of
      its assets in Idaho Falls, Idaho (excluding real estate) to Lockwood Packaging
      Corporation for $330,000. The Company also sold the Idaho Falls real estate
      (land and building). During July and August of 1997 Chase sold most of its
      inventory in Portland to other packaging companies. The Company also sold its
      band label extruder for $125,000 with remaining inventory and machinery and
      equipment sold at an August 14 auction for gross proceeds of approximately
      $340,000. As of December 31, 1997, the Company had completed the liquidation
      of
      all of its assets.





Effective
      January 1, 1999, the Board of Directors has been devoting its efforts to
      establishing a new business and accordingly, the Company is being treated as
      a
      development stage company, in accordance with Statement of Financial Accounting
      Standards No. 7, as of that date. The Company continues to pay for minor
      administrative expenses and is generating interest income on its remaining
      cash
      balance.





During
      2001, the Company sold common shares in a private placement and together with
      the exercise of common stock purchase warrants, realized net proceeds of $5,500.
      During 2002, the Company received common stock subscriptions aggregating $8,000.
      In 2004, 2005, and 2006 the Company received aggregate net proceeds of $47,000
      from the issuance of 5% convertible notes. As in the past the Company believes
      that it will be able to satisfy its ongoing minimal expenses from loans from
      its
      officers/shareholders.





During
      2006, the Company recorded a net loss of $12,707 compared with $16,627 for
      2005
      due principally to higher interest expense and less general administrative
      expenses. The Company as of December 31, 2006 has cumulative losses of $54,887
      during its development stage since January 1, 1999. The Company has had
      recurring losses from operations and its dependency on future financing raises
      substantial doubt about its ability to continue as a going concern.





No
      officers of the Company have received a salary during the development stage
      due
      to the minimal amount of time spent by any officer.








3





**ITEM
      7. FINANCIAL STATEMENTS.**





**CHASE
      PACKAGING CORPORATION**


**FOR
      THE YEARS ENDED DECEMBER 31, 2006 AND 2005**











**-
      INDEX TO FINANCIAL STATEMENTS -**








**Page(s)**Report
                of Independent Registered Public Accounting Firm
            
            F-2Financial
                Statements:Balance
                sheets
            
            F-3Statements
                of Operations
            
            F-4Statements
                of Shareholders’ Deficit
            
            F-5Statements
                of Cash Flows
            
            F-6Notes
                to Financial Statements.
            
            F-7
                - F-10








F-1


**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**











To
      The
      Shareholders


Chase
      Packaging Corporation











We
      have
      audited the accompanying balance sheets of Chase Packaging Corporation (A
      Development Stage Company) as of December 31, 2006 and 2005 and the related
      statements of operations, shareholders’ deficit and cash flows for the years
      then ended and for the development stage period (from January 1, 1999 to
      December 31, 2006). These financial statements are the responsibility of the
      Company’s management. Our responsibility is to express an opinion on these
      financial statements based on our audits.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audits to obtain reasonable assurance about whether the
      financial statements are free of material misstatement. The Company is not
      required to have, nor were we engaged to perform, an audit of its internal
      control over financial reporting. Our audits included consideration of internal
      control over financial reporting as a basis for designing audit procedures
      that
      are appropriate in the circumstances, but not for the purpose of expressing
      an
      opinion on the effectiveness of the Company's internal control over financial
      reporting. Accordingly, we express no such opinion. An audit also includes
      examining, on a test basis, evidence supporting the amounts and disclosures
      in
      the financial statements, assessing the accounting principles used and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. We believe that our audits provide a
      reasonable basis for our opinion.





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of Chase Packaging Corporation as
      of
      December 31, 2006 and 2005, and the results of its operations and its cash
      flows
      for the years then ended and for the development stage period from January
      1,
      1999 to December 31, 2006 in conformity with accounting principles generally
      accepted in the United States of America.





The
      accompanying financial statements have been prepared assuming the Company will
      continue as a going concern. As discussed in Note 1, the Company’s recurring
      losses from operations and its dependency on future financing raise substantial
      doubt about its ability to continue as a going concern. Management’s plans
      concerning these matters are also discussed in Note 1. The financial statements
      do not include any adjustments that might result from the outcome of these
      uncertainties.

















**____________________________**


**LAZAR
      LEVINE & FELIX LLP**








New
      York,
      New York


March
      20,
      2007





F-2


**CHASE
      PACKAGING CORPORATION**


**(A
      Development Stage Company)**


**BALANCE
      SHEETS**


**AS
      OF DECEMBER 31, 2006 AND 2005**











**2006**
            
            2005**-
                ASSETS -****CURRENT
                ASSETS:**Cash
                and cash equivalents
            
            **$**
            **2,691**
            
            $
            1,186**TOTAL
                ASSETS**
            
            **$**
            **2,691**
            
            $
            1,186**-
                LIABILITIES AND SHAREHOLDERS' (DEFICIT) -****CURRENT
                LIABILITIES:**Accrued
                expenses
            
            **$**
            **8,696**
            
            $
            9,484Convertible
                notes payable
            
            
            **47,000**
            
            
            -**TOTAL
                CURRENT LIABILITIES**
            
            
            **55,696**
            
            
            9,484**CONVERTIBLE
                NOTES PAYABLE**
            
            
            **-**
            
            
            32,000**COMMITMENTS
                AND CONTINGENCIES****SHAREHOLDERS'
                (DEFICIT):**Preferred
                stock $1.00 par value; 4,000,000 shares authorized, none issued and
                outstanding
            
            
            **-**
            
            
            -Common
                stock $.10 par value, 25,000,000 shares authorized, 8,627,275 shares
                issued and outstanding
            
            
            **862,728**
            
            
            862,728Additional
                paid-in capital
            
            
            **2,757,275**
            
            
            2,757,275Common
                stock subscribed
            
            
            **8,000**
            
            
            8,000Accumulated
                deficit
            
            
            **(3,626,121**
            **)**
            
            (3,626,121
            )Deficit
                accumulated during the development stage
            
            
            **(54,887**
            **)**
            
            (42,180
            )**TOTAL
                SHAREHOLDERS’ (DEFICIT)**
            
            
            **(53,005**
            **)**
            
            (40,298
            )**TOTAL
                LIABILITIES AND SHAREHOLDERS’ (DEFICIT)**
            
            **$**
            **2,691**
            
            $
            1,186








See
        notes
        to financial statements.







F-3


**CHASE
      PACKAGING CORPORATION**


**(A
      Development Stage Company)**


**STATEMENTS
      OF OPERATIONS**











**Cumulative**
              **During
                the Development Stage (January 1, 1999 to**
            
            **For
                the Year Ended**
              **December
                31,****December
                31, 2006**
            
            **2006**
            
            2005**NET
                SALES**
            
            **$**
            **-**
            
            **$**
            **-**
            
            $
            -**COSTS
                AND EXPENSES:**General
                and administrative expense
            
            
            **58,803**
            
            
            **10,300**
            
            
            14,800Reversal
                of over-accrued expenses
            
            
            **(7,077**
            **)**
            
            **-**
            
            
            -Interest
                expense
            
            
            **4,391**
            
            
            **2,515**
            
            
            1,876Interest
                income
            
            
            **(1,230**
            **)**
            
            **(108**
            **)**
            
            (49
            )**54,887**
            
            
            **12,707**
            
            
            16,627**LOSS
                BEFORE INCOME TAXES**
            
            
            **(54,887**
            **)**
            
            **(12,707**
            **)**
            
            (16,627
            )Provision
                for income taxes
            
            
            **-**
            
            
            **-**
            
            
            -**NET
                LOSS**
            
            **$**
            **(54,887**
            **)**
            **$**
            **(12,707**
            **)**
            $
            (16,627
            )**LOSS
                PER COMMON SHARE - Basic and diluted**
            
            
            
            
            **$**
            **-**
            
            $
            -**WEIGHTED
                AVERAGE COMMON****SHARES
                OUTSTANDING**
            
            
            
            
            
            **8,627,275**
            
            
            **8,627,275**








See
      notes
      to financial statements.







F-4


**CHASE
      PACKAGING CORPORATION**


**(A
      Development Stage Company)**


**STATEMENTS
      OF SHAREHOLDERS’ (DEFICIT** **)**








**Common
                Stock**
            
            **AdditionalPaid-in**
            
            **Common
                Stock**
            
            **Accumulated**
            
            **(Deficit)
                Accumulated During the Development****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
            )
            
            -
            
            
            -
            
            
            -
            
            
            5,500Net
                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
            
            
            -
            
            
            -
            
            
            8,000Net
                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
            
            
            1,237Balance
                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
            )**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**
            **)**





See
        notes
        to financial statements.
 F-5


**CHASE
      PACKAGING CORPORATION**


**(A
      Development Stage Company)**


**STATEMENTS
      OF CASH FLOWS**




**Cumulative**
              **During
                theDevelopment Stage (January 1, 1999 to**
            
            **For
                The Year Ended****December
                31,********December
                31, 2006)**
            
            **2006**
            
            2005**(DECREASE)
                INCREASE IN CASH AND CASH EQUIVALENTS****CASH
                FLOWS FROM OPERATING ACTIVITIES:**Net
                loss
            
            **$**
            **(54,887**
            **)**
            **$**
            **(12,707**
            **)**
            $
            (16,627
            )**Change
                in assets and liabilities:**Accrued
                expenses
            
            
            **(14,583**
            **)**
            
            **(788**
            **)**
            
            (2,421
            )**Net
                cash (used in) operating activities**
            
            
            **(69,470**
            **)**
            
            **(13,495**
            **)**
            
            (19,048
            )**CASH
                FLOWS FROM INVESTING ACTIVITIES**
            
            
            **-**
            
            
            **-**
            
            
            -**CASH
                FLOWS FROM FINANCING ACTIVITIES**Proceeds
                from convertible debt
            
            
            **47,000**
            
            
            **15,000**
            
            
            19,500Proceeds
                from private placement/exercise of stock warrants
            
            
            **5,500**
            
            
            **-**
            
            
            -Capital
                contribution
            
            
            **8,000**
            
            
            **-**
            
            
            -**Net
                cash provided by financing activities**
            
            
            **60,500**
            
            
            **15,000**
            
            
            19,500**NET
                (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS**
            
            
            **(8,970**
            **)**
            
            **1,505**
            
            
            452Cash
                and cash equivalents, at beginning of period
            
            
            **11,661**
            
            
            **1,186**
            
            
            734**CASH
                AND CASH EQUIVALENTS, END OF PERIOD**
            
            **$**
            **2,691**
            
            **$**
            **2,691**
            
            $
            1,186





See
        notes
        to financial statements.
 F-6


**CHASE
      PACKAGING CORPORATION**


**(A
      Development Stage Company)**


**NOTES
      TO FINANCIAL STATEMENTS**


**DECEMBER
      31, 2006 AND 2005**





**NOTE
      1 -**  **DESCRIPTION
      OF COMPANY / BASIS OF PRESENTATION:**





Chase
      Packaging Corporation (“the Company”), a Texas Corporation, manufactured woven
      paper mesh for industrial applications, polypropylene mesh fabric bags for
      agricultural use and distributed agricultural packaging manufactured by other
      companies. The Company was a wholly-owned subsidiary of TGC Industries, Inc.
      (TGC) through July 31, 1996.





The
      Company had experienced losses for past years, and the Company’s secured lender
      decided not to renew the Company’s operating line of credit. As a result, the
      Company’s Board of Directors determined that it was in the best interest of the
      Company and all of its creditors to liquidate in an orderly fashion.





On
      June
      25, 1997, the Company announced to employees and creditors that it would begin
      an orderly liquidation of all its assets beginning at the close of business
      on
      June 30, 1997. On July 25, 1997, the Company notified its creditors by mail
      that
      it would commence with an orderly liquidation of all its remaining assets
      outside of a formal bankruptcy or receivership proceeding in a manner intended
      to maximize asset values. Liquidation of the Company’s assets was completed as
      of December 31, 1997.





The
      Board
      of Directors has been devoting its efforts to establishing a new business and,
      accordingly, the Company is being treated as a development stage company, in
      accordance with Statement of Financial Accounting Standards No. 7, effective
      January 1, 1999.





These
      financial statements have been presented on the basis that the Company is a
      going concern, which contemplates the realization of assets and the satisfaction
      of liabilities in the normal course of business. As discussed earlier, the
      Company is in the development stage, has no business operations of its own
      and
      has no sources of revenue. Further, as of December 31, 2006, the Company has
      negative working capital of $53,005, an accumulated deficit of $3, 681,008
      ($54,887 realized during the development stage period from January 1, 1999
      to
      December 31, 2006) and a total shareholders’ deficit of $53,005, all of which
      raise substantial doubt about the Company’s ability to continue as a going
      concern.





Managements’
      plans for the Company include securing a merger or acquisition, raising
      additional capital and other strategies designed to optimize shareholder value.
      However, no assurance can be given that management will be successful in its
      efforts. The failure to achieve these plans will have a material adverse effect
      on the Company’s financial position, results of operations and ability to
      continue as a going concern.








**NOTE
      2 -**  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES:**





The
      Company’s accounting policies are in accordance with accounting policies
      generally accepted in the United States of America. Outlined below are those
      policies which are considered particularly significant.





***(a)***  ***Use
      of Estimates:***





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






F-7


**CHASE
      PACKAGING CORPORATION**


**(A
      Development Stage Company)**


**NOTES
      TO FINANCIAL STATEMENTS**


**DECEMBER
      31, 2006 AND 2005**





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





***(b)***  ***Income
      Taxes:***





The
      asset
      and liability method is used in accounting for income taxes. Under this method,
      deferred tax assets and liabilities are recognized for operating loss and tax
      credit carry forwards and for the future tax consequences attributable to
      differences between the financial statement carrying amounts of existing assets
      and liabilities and their respective tax bases. Deferred tax assets and
      liabilities are measured assuming enacted tax rates expected to apply to taxable
      income in the years in which those temporary differences are expected to be
      recovered or settled. The effect on deferred tax assets and liabilities of
      a
      change in tax rates is recognized in the results of operations in the period
      that includes the enactment date. A valuation allowance is recorded to reduce
      the carrying amounts of deferred tax assets unless it is more likely than not
      that such assets will be realized.





***(c)***  ***Loss
      per Common Share:***





Loss
      per
      common share - basic and diluted was calculated by dividing the net loss by
      the
      weighted average number of shares outstanding for each period
      presented.





***(d)*** ***Recently
      Issued Accounting Pronouncements Affecting the
      Company:***




Statement
      of Financial Accounting Standard 157, Fair Value Measurements (“SFAS
      157”)




In
      September 2006, the Financial Accounting Standard Board issued a standard that
      provides enhanced guidance for using fair value to measure assets and
      liabilities. The standard applies whenever other standards require (or permit)
      assets or liabilities to be measured at fair value. The standard does not expand
      the use of fair value in any new circumstances.




This
      Statement is effective for financial statements issued for fiscal years
      beginning after November 15, 2007, and interim periods within those fiscal
      years. Earlier application is encouraged, provided that the reporting entity
      has
      not yet issued financial statements for that fiscal year, including financial
      statements for an interim period within that fiscal year. The application of
      this statement is not expected to have an impact on the Company’s financial
      statement.




SEC
      Staff Accounting Bulletin 108 (“SAB 108”), Considering the Effects of Prior Year
      Misstatements when Qualifying Misstatements in Current Year Financial
      Statements




In
      September 2006, the SEC staff issued Staff Accounting Bulletin No. 108,
      "Considering the Effects of Prior Year Misstatements when Quantifying
      Misstatements in Current Year Financial Statements." SAB 108 was issued in
      order
      to eliminate the diversity of practice surrounding how public companies quantify
      financial statement misstatements.






F-8





**CHASE
      PACKAGING CORPORATION**


**(A
      Development Stage Company)**


**NOTES
      TO FINANCIAL STATEMENTS**


**DECEMBER
      31, 2006 AND 2005**




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





***(d)*** ***Recently
      Issued Accounting Pronouncements Affecting the Company
      (Continued)***





Traditionally,
      there have been two widely-recognized methods for quantifying the effects of
      financial statement misstatements: the “roll-over” method and the “iron curtain”
method. The roll-over method focuses primarily on the impact of a misstatement
      on the income statement—including the reversing effect of prior year
      misstatements—but its use can lead to the accumulation of misstatements in the
      balance sheet. The iron-curtain method, on the other hand, focuses primarily
      on
      the effect of correcting the period-end balance sheet with less emphasis on
      the
      reversing effects of prior year errors on the income statement.





In
      SAB
      108, the SEC provided guidance on the consideration of the effects of prior
      year
      misstatements in quantifying current year misstatements for the purpose of
      materiality assessment. This model is commonly referred to as a "dual approach"
      because it requires quantification of errors under both the iron curtain and
      the
      roll-over methods. SAB 108 permits existing public companies to initially apply
      its provisions either by (i) restating prior financial statements as if the
      "dual approach" had always been used or (ii) recording the cumulative effect
      of
      initially applying the "dual approach" as adjustments to the carrying values
      of
      assets and liabilities as of January 1, 2006 with an offsetting adjustment
      recorded to the opening balance of retained earnings. The application of this
      statement is not expected to have an impact on the Company’s financial
      statement.





Financial
      Accounting Standards Board (FASB) No. 48, Accounting for Uncertainty in
      Income Taxes (“FIN 48”)





In
      July 2006, the Financial Accounting Standards Board (FASB) issued FASB
      Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an
      interpretation of FASB Statement No. 109 (FIN 48), which provides
      clarification related to the process associated with accounting for uncertain
      tax positions recognized in consolidated financial statements. FIN 48
      prescribes a more-likely-than-not threshold for financial statement recognition
      and measurement of a tax position taken, or expected to be taken, in a tax
      return. FIN 48 also provides guidance related to, among other things,
      classification, accounting for interest and penalties associated with tax
      positions, and disclosure requirements. We are required to adopt FIN 48 on
      November 1, 2007, although early adoption is permitted. The Company is
      currently evaluating the impact of adopting FIN 48 on its financial
      statements.








**NOTE
      3 -**  **INCOME
      TAXES:**






**2006**
            
            2005Deferred
                tax assets and liabilities consist of the following:**Deferred
                tax assets:**Net
                operating loss carry forwards
            
            **$**
            **1,122,000**
            
            $
            1,120,000Less
                valuation allowance
            
            
            **(1,122,000**
            **)**
            
            (1,120,000
            )**$**
            **-**
            
            $
            -





At
      December 31, 2006, the Company had approximately $3,300,000 of net operating
      loss carry forwards (“NOL’s”) available which expires in years beginning in
      2011. The benefits of these NOL’s may be substantially reduced in the future if
      the Company is successful in establishing a new business. Since the Company
      cannot determine that it is more likely than not that they will be able to
      utilize the deferred tax asset, a 100% a valuation allowance has been
      provided.






F-9


**CHASE
      PACKAGING CORPORATION**


**(A
      Development Stage Company)**


**NOTES
      TO FINANCIAL STATEMENTS**


**DECEMBER
      31, 2006 AND 2005**







**NOTE
      3 -**  **INCOME
      TAXES (Continued):**





In
      accordance with certain provisions of the Tax Reform Act of 1986, a change
      in
      ownership of greater than 50% within a three year period will place an annual
      limitation on the corporation’s ability to utilize its existing tax benefit
      carryforwards.








**NOTE
          4 -** **CONVERTIBLE
          DEBT:**





The
      Company has issued the following 5% Convertible Notes:




2004
                  third quarter
              
              $
              12,5002005
                  first quarter
              
              
              4,0002005
                  second quarter
              
              
              8,0002005
                  third quarter
              
              
              5,0002005
                  fourth quarter
              
              
              2,5002006
                  first quarter
              
              
              7,5002006
                  second quarter
              
              
              7,500$
              47,000




The
      note
      holders are directors and an officer of the Company. The Notes are convertible
      into common stock at $0.01 or par value (currently $0.10 per share) whichever
      is
      greater. The Company and the Note Holders have the option to mutually extend
      the
      term of the Notes if the par value has not been reduced to $0.01. If the Notes
      are converted at par greater than $0.01, then the Note Holders will, upon
      conversion, receive a Unit consisting of one share of common stock and a 10-year
      warrant exercisable at the then par value of the common stock. The Company
      has
      analyzed the conversion feature of this debt as an embedded derivative using
      the
      guidance provided in SFAS 133 - 'Accounting for Derivative Instruments and
      Hedging Activities" and Emerging Issues Task Force 00-19-1 "Accounting for
      Derivative Financial Instruments Indexed to, and Potentially Settled in, a
      Company's Own Stock" and has concluded that the conversion feature is afforded
      equity classification since the Company has sufficient authorized and unissued
      shares available to settle the contract after considering all other commitments
      that may require the issuance of stock during the maximum period the derivative
      contract could remain outstanding. Interest will accrue and be paid at maturity
      and, if unpaid, added to principal at the time of conversion. The notes, which
      were originally due one year from issuance, have been extended and are all
      now
      due on July 15, 2007. Interest accrued and unpaid as of December 31, 2006 and
      2005, aggregated $4,391 and $1,876, respectively. Interest expense on these
      notes was $2,515 and $1,876 for the years ended December 31, 2006 and 2005,
      respectively.








**NOTE
      5 -**  **SHAREHOLDERS’
      (DEFICIT):**





In
      July
      2002, the Company received $8,000 as payment for 800,000 shares of common stock.
      Such shares have not been issued as of the filing of this report.








F-10


**ITEM
      8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE.**





None.








**ITEM
      8A. CONTROLS AND PROCEDURES.**





(a)
      Evaluation of Disclosure Controls and Procedures.





Under
      the
      supervision and with the participation of our management, including our
      principal executive officer and principal financial officer, as of the end
      of
      the period covered by this report, we conducted an evaluation of the
      effectiveness of the design and operation of our disclosure controls and
      procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
      Act
      of 1934, as of the end of the period covered by this report. Based on this
      evaluation, our principal executive officer and principal financial officer
      concluded that, as of the period covered by this report, our disclosure controls
      and procedures were effective to provide reasonable assurance that the
      information required to be included in our Securities and Exchange Commission
      (“SEC”) reports is recorded, processed, summarized and reported within the time
      periods specified in SEC rules and forms,.





(b)
      Changes in Internal Controls Over Financial Reporting.





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








4






**PART
      III**







**ITEM
      9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
      WITH
      SECTION 16(a) OF THE EXCHANGE ACT.**





The
      Board
      of Directors of the Company consists of three persons who will serve until
      the
      next annual meeting of shareholders of the Company. The following table sets
      forth certain information concerning the individuals serving as Directors of
      the
      Company:





Name
                and Age
            
            Date
                Since Which Continuously a Director of the Company
            
            Business
                Experience and Other DirectorshipsAllen
                T. McInnes, 69
            
            1993
            
            Currently
                Dean of the Business School of Texas Tech University; Chairman of
                the
                Board of TGC Industries, Inc. since 1993 and Chief Executive Officer
                from
                August, 1993 to March 31, 1996; Executive Vice President and Director
                of
                Tenneco, Inc. 1960-1992; Director of TETRA Technologies since April
                1,
                1996Herbert
                M. Gardner, 67
            
            2001
            
            Executive
                Vice President and Treasurer of Barrett-Gardner Associates, Inc.,
                an
                investment banking firm; Director of Co-Active Marketing Group, Inc.,
                a
                marketing and sales promotion company; Director of Nu Horizons Electronics
                Corp., an electronic component distributor; Chairman of the Board
                and
                Director of Supreme Industries, Inc., a manufacturer of specialized
                truck
                bodies and shuttle buses, since 1979; Director of TGC Industries,
                a
                seismic services company; Director of Rumson-Fair Haven Bank and
                Trust
                Company, a New Jersey state independent, commercial bank and trust
                company.William
                J. Barrett, 67
            
            2001
            
            President
                of Barrett-Gardner Associates, Inc., an investment banking firm;
                Director
                of Supreme Industries, Inc., a specialized manufacturer of truck
                bodies
                and shuttle buses; Director of TGC Industries, Inc., a seismic services
                company; Chairman of the Board of Rumson-Fair Haven Bank and Trust
                Company, a New Jersey state independent, commercial bank and trust
                company.





Unaffiliated
      Directors of the Company are not paid fees, but will be reimbursed for expenses
      in connection with meetings of the Board of Directors attended by
      them.





5


**Executive
      Officers**





The
      following table sets forth certain information concerning the persons who serve
      as executive officers of the Company, and will continue to serve in such
      positions, as the discretion of the Board of Directors. For those persons who
      are also Directors of the Company, additional information appears
      above.





Name
            Age
            PositionAllen
                T. McInnes
            69
            Chairman,
                President








To
      the
      best of the Company's knowledge all directors, executive officers, and
      beneficial owners have complied with the requirements of Section 16(a) of the
      Exchange Act.








**ITEM
      10. EXECUTIVE COMPENSATION.**





No
      compensation has been paid by the Company to any officer during the past 3
      years. In addition, no compensation has been accrued or provided for due to
      the
      minimal amount of time spent by any officer.








6







**ITEM
      11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS.**





The
      following table sets forth the names of those persons known to Management to
      be
      beneficial owners of more than five percent of the Company's $.10 par value
      Common Stock as of June 1, 2003. The table also sets forth information with
      respect to the Company's Common Stock which is beneficially owned by each
      director and executive officer of the Company, and by all directors and officers
      of the Company as a group, as of June 1, 2003 (including shares beneficially
      owned by such persons, pursuant to the rules of beneficial ownership, as a
      result of the ownership of certain warrants or options) according to data
      furnished by the persons named. Persons having direct beneficial ownership
      of
      the Company's Common Stock possess the sole voting and dispositive power in
      regard to such stock.





Name
                and address
            
            Title
                of Class
            
            Amount
                and Nature of
              Beneficial
                Owner
            
            Approximate
                Percentage
              of
                Class(1)Allen
                T. McInnes
            
            Common
            
            1,318,954
            
            16.22%Herbert
                M. Gardner
            
            Common
            
            911,083(2)
            
            11.20%William
                J. Barrett
            
            Common
            
            1,035,060(3)
            
            12.73%Special
                Situations Funds(4)
              153
                E. 53rd Street, 51st Fl.
              New
                York, NY 10022
            
            Common
            
            789,165
            
            9.70%All
                directors & officers as a group
              (3
                persons)
            
            Common
            
            3,265,097(5)
                (6)
            
            40.15%








(1) The
      percentage calculations have been made in accordance with Rule 13d- 3(d) (1)
      promulgated under the Securities Exchange Act of 1934.


(2) Excludes
      78,590 shares of Common Stock owned by Herbert M. Gardner's wife. Mr. Gardner
      has disclaimed beneficial ownership of these shares.





(3) Excludes
      119,345 shares of Common Stock owned by William J. Barrett's wife. Mr. Barrett
      has disclaimed beneficial ownership of these shares.





(4) MGP
      Advisors Limited Partnership ("MGP") is the general partner of Special
      Situations Funds ("Special Situations"). AWM Investment Company, Inc. ("AWM")
      is
      the sole general partner of MGP. Austin W. Marxe is the principal limited
      partner of MGP and is the President and Chief Executive Officer of
      AWM.





(5) Excludes
      800,000 shares of Common Stock issuable pursuant to $8,000 received in July
      2002.





(6) Excludes
      shares of Common Stock issuable pursuant to the conversion of $47,000 of 5%
      Convertible Notes due 2007. (See Note 4 to Financial Statements for terms of
      conversion.)








**ITEM
      12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.**





To
      the
      best of the Company's knowledge there have been no transactions with management
      or other related parties to which the Company has been a party.





7





**ITEM
      13. EXHIBITS**





**Exhibits**





Exhibit
      31.1 Certification of the Chief Executive Officer pursuant to Section 302 of
      the
      Sarbanes-Oxley Act of 2002.


Exhibit
      31.2 Certification of the Principal Financial and Accounting Officer pursuant
      to
      Section 302 of the Sarbanes-Oxley Act of 2002.


Exhibit
      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.


Exhibit
      32.2 Certification of the Principal Financial Officer pursuant to 18 U.S.C.
      Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
      of
      2002.








**ITEM
      14. PRINCIPAL ACCOUNTANT FEES AND SERVICES**





**Audit
      Fees**





The
      aggregated fees billed for each of the last two fiscal years for professional
      services rendered by the principal accountant for the audit of our annual
      financial statements and review of financial statements included in our Forms
      10-QSB were $12,500 and $12,000 for 2006 and 2005, respectively.





**Audit
      Related Fees**





None





**Tax
      Fees**





The
      aggregated fees billed for each of the last two fiscal years for professional
      services rendered by the principal accountant for the preparation of our
      corporate tax returns were $1,500 for each of the 2006 and 2005
      years.





**All
      Other Fees**





None





**Audit
      Committee Pre-Approval Policies**





The
      Board
      of Directors which functions as the audit committee makes reasonable inquiry
      as
      to the independence of our principal auditors based upon the considerations
      set
      forth in Rule 2-01 of Regulation S-X, including the examination of
      representation letters furnished by the principal accountant. The audit
      committee has not approved any services beyond those required for the audit
      of
      our annual financial statements and review of financial statements included
      in
      our Forms 10-KSB and the preparation of our annual tax return.


8





**SIGNATURES**





In
      accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
      this report to be signed on its behalf by the undersigned, thereunto duly
      authorized.





**CHASE
      PACKAGING CORPORATION**




Date: October
                  16, 2007
                By:
                /s/
                  Allen McInnesAllen
                    McInnes
                  President
                    & Principal Executive OfficerBy:
                /s/ Ann W. GreenAnn
                    W. Green
                  Assistant
                    Secretary
                  Principal
                    Financial and Accounting
                    Officer


9