Table of Contents

 

 

 

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 10-K**

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

 

**For the fiscal year ended December 31, 2010**

 
| **o** | ** ** | **TRANSITION REPORT PURSUANT TO   SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|-------|------------|----------------------------------------------------------------------------------------------------------|

 

**For the transition period from                  to                   .**

** **

**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 incorporation or organization) |       | (I.R.S. Employer Identification No.) |

 

| **636 River Road, Fair 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, par value $.10 per share**

 

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

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes o  No x

 

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

 

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

 

Indicate by check mark if disclosure 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 of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

 

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

 

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

 

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

 

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business day of the Registrant’s most recently completed second fiscal quarter was $479,919.

 

Number of shares of common stock outstanding as of March 30, 2011:  15,536,275

 

**Documents incorporated by reference**

 

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

 

Proxy statement for the 2011 annual meeting of shareholders — Part III

 

 

 

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**PART I**

 
| **ITEM 1.** | ** ** | **BUSINESS.** |
|-------------|------------|---------------|

 

**General**

 

Chase Packaging Corporation (“Chase,” the “Company,” “we,” or “us”) is a Texas corporation which, prior to 1998, 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 (described below) which was completed in 1997.  At present, management of the Company is seeking to secure a suitable merger partner wishing to go public or to acquire private companies to create investment value for the Company.  For purposes of Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company is considered a shell company.

 

**History**

 

*Prior Business Operations*

 

The Company was established in July of 1993 as a wholly-owned subsidiary of TGC Industries, Inc.  On July 30, 1993, the Company purchased certain assets of Union Camp Corporation’s packaging division 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 Union Camp’s packaging division. 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 experienced losses from 1994 through 1997, and in 1997 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 reduce the Company’s loan balance with its lender.

 

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 intended to maximize the asset values. The Company retained the firm of Edward Hostmann, Inc. to assist the Company in such liquidation which was completed during 1997.

 

*Post-Liquidation Operations*

 

Since 1999, the Board of Directors has devoted its efforts to establishing a new business or engaging in a merger or other reorganization transaction 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.

 

The Company closed a private placement of 13,334 units (the “Units”) on September 7, 2007.  Each Unit was sold for $150 and consisted of:  one share of Series A 10% Convertible Preferred Stock ($100 stated value) convertible into 1,000 shares of the Company’s common stock (the “common stock”); 500 shares of common stock; and 500 five-year warrants, each warrant exercisable 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 net proceeds were approximately $1,962,000.

 

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| **ITEM 1A.** | ** ** | **RISK FACTORS.** |
|--------------|------------|-------------------|

 

***The expenses related to identifying a target business and to complete a business combination will increase our losses.***

 

Until presented with a specific opportunity for a business combination, we will be unable to ascertain with any degree of certainty the time and costs required to select and evaluate a target business and to structure and complete the business combination.  Any costs incurred in connection with the identification and evaluation of a prospective target business with which a business combination is not ultimately completed will result in a loss to us and reduce the amount of capital otherwise available to complete a business combination and thereafter operate the acquired business.  We cannot provide assurance that we will be successful in identifying a target business and completing a business combination on terms favorable to our shareholders, if at all.

 

***The tax treatment of a potential business combination is not clear.***

 

We will endeavor to structure a business combination so as to achieve the most favorable tax treatment to us and to the target business and the shareholders of both companies.  We cannot provide assurance that the Internal Revenue Service or appropriate state tax authorities will agree with our tax treatment of the business combination.

 

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

 

Although we intend to carefully scrutinize the management of a prospective target business before effecting a business combination, we cannot assure you that our assessment of the target’s management will prove to be correct.  In addition, we cannot assure you that the target’s future management will have the necessary skills, qualifications, or abilities to manage a public company.  Furthermore, the future role of our officers and directors, if any, in the target business cannot presently be stated with any certainty.  While it is possible that one or more of our officers and directors will remain associated in some capacity following a business combination, it is uncertain whether all of them will devote their full efforts to our affairs after a business combination.  Moreover, we cannot assure you that our officers and directors will have significant experience or knowledge relating to the operations of the particular target business.

 

We may seek to recruit additional management personnel to supplement the incumbent management of the target business.  We cannot assure you, however, that we will be able to recruit additional managers who have the requisite skills, knowledge, or experience necessary to enhance the incumbent management and successfully operate the target business.

 

***In our search for an appropriate combination partner, we will have to compete with other entities with more experience and greater resources; after a successful business combination we will have to face the competitors of the operating company we combine with.***

 

We may encounter intense competition from other entities seeking to combine with a privately held operating company.  Many of these entities, including financial consulting companies and venture capital firms, have longer operating histories and have extensive experience in identifying and effecting business combinations.  Many of these competitors also possess significantly greater financial, technical, and other resources than we do.  We cannot assure you that we will be able to effectively compete with these entities. Consequently, we may acquire a company with less favorable prospects then we would otherwise prefer, thus making our long-term prospects for success less likely.

 

If we effect a business combination, we will become subject to competition from the competitors of the acquired business.  In particular, industries that experience rapid growth frequently attract larger numbers of competitors, including competitors with greater financial, marketing, technical, and other resources than our resources.  We cannot ascertain the level of competition we will face if we effect a business combination, and we cannot assure you that we will be able to compete successfully with these competitors.

 

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***The Pink Sheets are characterized by high volatility which may negatively affect our stock price.***

 

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

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

 

None.

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

 

The Company neither rents nor owns any properties.  The Company utilizes the office space and equipment of its management at no cost.  Management estimates such amounts to be immaterial.  The Company currently has no policy with respect to investment or interests in real estate, real estate mortgages, or securities of, or interests in, persons primarily engaged in real estate 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 common stock trades in the Pink Sheets under the symbol “CPKA.”  American Stock Transfer and Trust Company has determined that there were approximately 270 holders of record on December 31, 2010.  Trading volume in the Company’s securities has been nominal.  The last reported high and low prices on December 31, 2010 were $0.08 and $0.08, respectively, and the last trade was $0.08.

 

High and low closing stock prices for the Company’s common stock in the years ended December 31, 2010 and December 31, 2009 are displayed in the following table:

 
| ** **             | ** ** | **2010 Market Price** | ** ** | **2009 Market Price** | ** ** |
|------------------------|------------|---------------------------------|------------|---------------------------------|------------|
| **Quarter Ended** | ** ** | **High**                        | ** ** | **Low**                         | ** ** | **High** | ** ** | **Low** | ** ** |
|                   |       |                            |       |                            |       |   |   |   |   |
| March 31          |       | $                               | 0.14       |                            | $          | 0.14 |   | $ | 0.10 |   | $ | 0.10 |   |
| June 30           |       | $                               | 0.05       |                            | $          | 0.05 |   | $ | 0.10 |   | $ | 0.10 |   |
| September 30      |       | $                               | 0.15       |                            | $          | 0.15 |   | $ | 0.25 |   | $ | 0.25 |   |
| December 31       |       | $                               | 0.08       |                            | $          | 0.08 |   | $ | 0.24 |   | $ | 0.15 |   |

 

The Company has never paid cash dividends on its shares of common stock and does not anticipate the payment of dividends on its shares of common stock in the foreseeable future.

 
| **ITEM 6.** | ** ** | **SELECTED FINANCIAL DATA.** |
|-------------|------------|------------------------------|

 

Not Applicable.

 

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

 

**Results of Operations**

 

During 2010, the Company had no operations and its only income was from interest income on its short-term investments which are classified as cash and cash equivalents.  General and administrative expenses were $88,113 in fiscal 2010 compared to $94,880 in fiscal 2009.  The Company had fiscal 2010 interest and other income of $829, and a net loss of ($87,284), compared with interest and other income of $2,720, and a net loss of ($92,160) for fiscal 2009.

 

**Liquidity and Capital Resources**

 

At December 31, 2010, the Company had cash and cash equivalents of approximately $1,582,000 consisting mostly of money market funds.  Management believes that its cash and cash equivalents are sufficient for its business activities for at least the next twelve months and for the costs of seeking an acquisition of an operating business.

 

Net cash of approximately $88,000 was used in operations during fiscal 2010, a decrease of approximately $9,000 over the $97,000 used in operations during fiscal 2009.

 

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

 

Net cash of approximately $1,200 was used in financing activities during both fiscal years 2010 and 2009.

 

**New Authoritative Pronouncements**

 

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

 

**Factors Which May Affect Future Results**

 

Future earnings of the Company are dependent on interest rates earned on the Company’s invested balances and expenses incurred. The Company expects to incur significant expenses in connection with its objective of identifying a merger partner or acquiring an operating business.

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

 

Not Applicable.

 

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

 

**CHASE PACKAGING CORPORATION**

**FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009**

 

**- 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                           | 13-18       |

 

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**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

 

To the Board of Directors and Shareholders of Chase Packaging Corporation

 

We have audited the accompanying balance sheets of Chase Packaging Corporation (a development stage company) (the “Company”) as of December 31, 2010 and 2009, and the related statements of operations, shareholders’ equity, and cash flows for the years then ended and for the period from January 1, 1999 (inception), to December 31, 2010. 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our 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, 2010 and 2009, and the results of its operations and its cash flows for the years then ended and from January 1, 1999 (inception), to December 31, 2010, in conformity with accounting principles generally accepted in the United States of America.

 

/s/ ParenteBeard LLC

 

ParenteBeard LLC

 

New York, New York

 

March 31, 2011

 

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**CHASE PACKAGING CORPORATION**

**(A Development Stage Company)**

**BALANCE SHEETS**

**DECEMBER 31, 2010 AND 2009**

 
| ** **                                                                                                                                                                                                                                                                                                  | ** ** | **2010**   | ** ** | **2009**   | ** ** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|------------|------------|------------|
|                                                                                                                                                                                                                                                                                                        |       |       |       |       |       |
| **- ASSETS   -**                                                                                                                                                                                                                                                                                            | ** ** | ** ** |       |       |       |
| ** **                                                                                                                                                                                                                                                                                                  | ** ** | ** ** |       |       |       |
| **CURRENT ASSETS:**                                                                                                                                                                                                                                                                                         |       |       |       |       |       |
| Cash and cash equivalents                                                                                                                                                                                                                                                                                   |       | $          | 1,581,989  |       | $          | 1,671,574 |   |
|                                                                                                                                                                                                                                                                                                        |       |       |       |       |       |
| **TOTAL ASSETS**                                                                                                                                                                                                                                                                                            |       | $          | 1,581,989  |       | $          | 1,671,574 |   |
|                                                                                                                                                                                                                                                                                                        |       |       |       |       |       |
| **-   LIABILITIES AND SHAREHOLDERS’ EQUITY -**                                                                                                                                                                                                                                                         | ** ** | ** ** |       |       |       |
|                                                                                                                                                                                                                                                                                                        |       |       |       |       |       |
| **CURRENT LIABILITIES:**                                                                                                                                                                                                                                                                                    | ** ** | ** ** |       |       |       |
| Accounts payable and accrued expenses                                                                                                                                                                                                                                                                       |       | $          | 1,388      |       | $          | 2,509 |   |
| **TOTAL CURRENT LIABILITIES**                                                                                                                                                                                                                                                                               |       | 1,388      |       | 2,509      |       |
|                                                                                                                                                                                                                                                                                                        |       |       |       |       |       |
| **COMMITMENTS AND CONTINGENCIES**                                                                                                                                                                                                                                                                           |       |       |       |       |       |
|                                                                                                                                                                                                                                                                                                        |       |       |       |       |       |
| **SHAREHOLDERS’ EQUITY:**                                                                                                                                                                                                                                                                              |       |       |       |       |       |
| Preferred stock, $1.00 par value; 4,000,000   authorized: Series A 10% Convertible Preferred stock; 50,000 shares   authorized; 18,775 and 17,078 shares issued and outstanding in 2010 and 2009,   respectively: liquidation preference of $1,877,500 and $1,707,800 in 2010 and   2009, respectively |       | 18,775     |       | 17,078     |       |
| 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                                                                                                                                                                                                                                                                                  |       | 4,077,068  |       | 4,079,945  |       |
| Accumulated deficit                                                                                                                                                                                                                                                                                         |       | (3,626,121 | )          | (3,626,121 | )          |
| Deficit accumulated during the development stage                                                                                                                                                                                                                                                            |       | (442,749   | )          | (355,465   | )          |
| **TOTAL SHAREHOLDERS’ EQUITY**                                                                                                                                                                                                                                                                         |       | 1,580,601  |       | 1,669,065  |       |
|                                                                                                                                                                                                                                                                                                        |       |       |       |       |       |
| **TOTAL LIABILITIES AND   SHAREHOLDERS’ EQUITY**                                                                                                                                                                                                                                                       |       | $          | 1,581,989  |       | $          | 1,671,574 |   |

 

The accompanying notes are an integral part of these financial statements.

 

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**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, 2010**                                                                | ** ** | **2010**                                                  | ** ** | **2009** | ** ** |
|                                                                      |       |                                                                                           |       |                                                      |       |   |   |
| **NET SALES**                                                             |       | $                                                                                              | —     |                                                      | $          | — |   | $ | — |   |
|                                                                      |       |                                                                                           |       |                                                      |       |   |   |
| **EXPENSES:**                                                             |       |                                                                                           |       |                                                      |       |   |   |
|                                                                      |       |                                                                                           |       |                                                      |       |   |   |
| General and administrative expense                                        |       | 493,500                                                                                        |       | 88,113                                                    |       | 94,880 |   |
|                                                                      |       |                                                                                           |       |                                                      |       |   |   |
| **LOSS FROM OPERATIONS**                                                  |       | (493,500                                                                                       | )          | (88,113                                                   | )          | (94,880 | ) |
|                                                                      |       |                                                                                           |       |                                                      |       |   |   |
| **OTHER INCOME (EXPENSE)**                                                |       |                                                                                           |       |                                                      |       |   |   |
|                                                                      |       |                                                                                           |       |                                                      |       |   |   |
| Interest expense                                                          |       | (8,591                                                                                         | )          | —                                                    |       | — |   |
| Interest and other income                                                 |       | 59,342                                                                                         |       | 829                                                       |       | 2,720 |   |
|                                                                      |       |                                                                                           |       |                                                      |       |   |   |
| **TOTAL OTHER INCOME (EXPENSE)**                                          |       | 50,751                                                                                         |       | 829                                                       |       | 2,720 |   |
|                                                                      |       |                                                                                           |       |                                                      |       |   |   |
| **LOSS BEFORE INCOME TAXES**                                              |       | (442,749                                                                                       | )          | (87,284                                                   | )          | (92,160 | ) |
|                                                                      |       |                                                                                           |       |                                                      |       |   |   |
| Provision for income taxes                                                |       | —                                                                                         |       | —                                                    |       | — |   |
|                                                                      |       |                                                                                           |       |                                                      |       |   |   |
| **NET LOSS**                                                              |       | $                                                                                              | (442,749   | )                                                         | $          | (87,284 | ) | $ | (92,160 | ) |
|                                                                      |       |                                                                                           |       |                                                      |       |   |   |
| **BASIC AND DILUTED LOSS PER   COMMON SHARE**                             |       |                                                                                           |       | $                                                         | (.01       | ) | $ | (.01 | ) |
| **WEIGHTED AVERAGE COMMON SHARES   OUTSTANDING — BASIC AND DILUTED** | ** ** | ** **                                                                                     |       | 15,536,275                                                |       | 15,536,275 |   |

 

The accompanying notes are an integral part of these financial statements.

 

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**CHASE PACKAGING 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 accompanying notes are an integral part of these financial statements.

 

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** **

**CHASE PACKAGING CORPORATION**

**(A Development Stage Company)**

**STATEMENTS OF SHAREHOLDERS’ 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 |   |
|                                                 |       |                     |       |                  |       |                           |       |               |       |            |       |                                                      |       |        |       |   |   |   |   |
| Preferred shares issued as dividend                  |       | 1,697                    |       | 1,697                 |       | —                         |       | —             |       | (1,697          | )          | —                                                    |       | —      |       | — |   | — |   |
|                                                 |       |                     |       |                  |       |                           |       |               |       |            |       |                                                      |       |        |       |   |   |   |   |
| Cash in lieu of stock                                |       | —                   |       | —                |       | —                         |       | —             |       | (1,180          | )          | —                                                    |       | —      |       | — |   | (1,180 | ) |
|                                                 |       |                     |       |                  |       |                           |       |               |       |            |       |                                                      |       |        |       |   |   |   |   |
| Net loss for the year   ended December 31, 2010 |       | —                   |       | —                |       | —                         |       | —             |       | —          |       | —                                                    |       | —      |       | (87,284 | ) | (87,284 | ) |
|                                                 |       |                     |       |                  |       |                           |       |               |       |            |       |                                                      |       |        |       |   |   |   |   |
| Balance at   December 31, 2010                  |       | 18,775                   |       | $                     |       |                           | 18,775     |               | 15,536,275 |            | $          |                                                      |       | 1,553,628   |       | $ |   |   | 4,077,068 |   | $ |   |   | — |   | $ |   |   | (3,626,121 | ) | $ |   |   | (442,749 | ) | $ |   |   | 1,580,601 |   |
|                                                      |            |                          |            |                       |            |                                |            |                    |            |                 |            |                                                           |            |             |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

The accompanying notes are an integral part of these financial statements.

 

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**CHASE PACKAGING CORPORATION**

**(A Development Stage Company)**

**STATEMENTS OF CASH FLOWS**

 
| ** **                                                                                                             | ** ** | **Cumulative   During the   Development Stage   (January 1, 1999 to** | ** ** | **For The Year Ended December   31,** | ** ** |
|------------------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------|------------|
| ** **                                                                                                             | ** ** | **December 31, 2010)**                                                               | ** ** | **2010**                                                  | ** ** | **2009** | ** ** |
|                                                                                                                   |       |                                                                                           |       |                                                      |       |   |   |
| **CASH FLOWS FROM OPERATING   ACTIVITIES:**                                                                            |       |                                                                                           |       |                                                      |       |   |   |
| Net loss                                                                                                               |       | $                                                                                              | (442,749   | )                                                         | $          | (87,284 | ) | $ | (92,160 | ) |
|                                                                                                                   |       |                                                                                           |       |                                                      |       |   |   |
| **Change in assets and   liabilities:**                                                                                |       |                                                                                           |       |                                                      |       |   |   |
| Accounts payable and accrued expenses                                                                                  |       | (13,791                                                                                        | )          | (1,121                                                    | )          | (4,845 | ) |
| **Net cash used in operating   activities**                                                                            |       | (456,540                                                                                       | )          | (88,405                                                   | )          | (97,005 | ) |
|                                                                                                                   |       |                                                                                           |       |                                                      |       |   |   |
| **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                                                                                 |       | (5,490                                                                                         | )          | (1,180                                                    | )          | (1,160 | ) |
| **Net cash provided by (used in)   financing activities**                                                              |       | 2,026,868                                                                                      |       | (1,180                                                    | )          | (1,160 | ) |
|                                                                                                                   |       |                                                                                           |       |                                                      |       |   |   |
| **NET INCREASE (DECREASE) IN CASH   AND CASH EQUIVALENTS**                                                             |       | 1,570,328                                                                                      |       | (89,585                                                   | )          | (98,165 | ) |
|                                                                                                                   |       |                                                                                           |       |                                                      |       |   |   |
| Cash and cash equivalents, at beginning of period                                                                      |       | 11,661                                                                                         |       | 1,671,574                                                 |       | 1,769,739 |   |
|                                                                                                                   |       |                                                                                           |       |                                                      |       |   |   |
| **CASH AND CASH EQUIVALENTS, END   OF PERIOD**                                                                         |       | $                                                                                              | 1,581,989  |                                                      | $          | 1,581,989 |   | $ | 1,671,574 |   |
|                                                                                                                   |       |                                                                                           |       |                                                      |       |   |   |
| **SUPPLEMENTAL CASH FLOW   INFORMATION:**                                                                              |       |                                                                                           |       |                                                      |       |   |   |
|                                                                                                                   |       |                                                                                           |       |                                                      |       |   |   |
| Cash paid for:                                                                                                         |       |                                                                                           |       |                                                      |       |   |   |
|                                                                                                                   |       |                                                                                           |       |                                                      |       |   |   |
| Interest                                                                                                               |       | $                                                                                              | —     |                                                      | $          | — |   | $ | — |   |
| Income taxes                                                                                                           |       | $                                                                                              | —     |                                                      | $          | — |   | $ | — |   |
|                                                                                                                   |       |                                                                                           |       |                                                      |       |   |   |
| Preferred stock issued as stock dividend                                                                               |       | $                                                                                              | 4,957      |                                                      | $          | 1,697 |   | $ | 1,542 |   |
| 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 accompanying notes are an integral part of these financial statements.

 

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**CHASE PACKAGING CORPORATION**

**(A Development Stage Company)**

**NOTES TO FINANCIAL STATEMENTS**

**DECEMBER 31, 2010 AND 2009**

 

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

 

Chase Packaging Corporation (“the Company”), a Texas Corporation, previously manufactured woven paper mesh for industrial applications, polypropylene mesh fabric bags for agricultural use, and distributed agricultural packaging manufactured by other companies.

 

Since January 1, 1999, the Board of Directors of the Company 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 Financial Accounting Standards Board’s (“FASB”) ASC 915.

 

Management’s 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****:**

 

***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.

 

***Cash and Cash Equivalents***

 

The Company considers all highly liquid investments that are readily convertible into cash with a remaining maturity of three months or less at the time of acquisition to be cash equivalents. The Company maintains its cash and cash equivalents balances with high credit quality financial institutions.  As of December 31, 2010, and 2009, the Company had cash and cash equivalents held in financial institutions that were uninsured by Federal Deposit Insurance Corporation in the amount of approximately $1,320,000 and $1,172,000, respectively.

 

***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 basis.  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.

 

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**CHASE PACKAGING CORPORATION**

**(A Development Stage Company)**

**NOTES TO FINANCIAL STATEMENTS**

**DECEMBER 31, 2010 AND 2009**

 

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

 

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

 

The Company adopted FASB Interpretation of, “Accounting for Uncertainty in Income Taxes.”  There was no impact on the Company’s financial position, results of operations, or cash flows as a result of implementing this guidance. At the adoption date of January 1, 2007 and at December 31, 2010 and 2009, the Company evaluated its tax positions and did not have any unrecognized tax benefits. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company currently has no federal or state tax examinations in progress.

 

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

 

Basic loss per common share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding.  Diluted loss per share is computed by dividing the net loss by the sum of the weighted-average number of shares of common stock outstanding plus the dilutive effect of shares issuable through the exercise of common stock equivalents.

 

We have excluded 25,684,000 and 23,987,000 common stock equivalents (warrants) from the calculation of diluted loss per share for the years ended December 31, 2010 and 2009, respectively, which, if included, would have an antidilutive effect.

 

***Recently Issued Accounting Pronouncements Affecting the Company:***

 

In January of 2010, the Financial Accounting Standards Board (“FASB”) issued guidance which clarified that the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a potential limitation on the total amount of cash that all shareholders can elect to receive in the aggregate is considered a share issuance that is reflected in earnings (loss) per share prospectively and is not a stock dividend. This update is effective for interim and annual periods ending on or after December 15, 2009, and should be applied on a retrospective basis. The adoption of this guidance had no impact on the Company’s financial statements.

 

***Fair Value Measurements***

 

The Company has adopted the provisions of FASB’s ASU 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. This ASU requires some new disclosures and clarifies some existing disclosure requirements about fair value measurement as set forth in Codification Subtopic 820-10. The FASB’s objective is to improve these disclosures and, thus, increase the transparency in financial reporting. Specifically, ASU 2010-06 amends Codification Subtopic 820-10 to now require:

 

·                  A reporting entity to disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers; and

 

·                  In the reconciliation for Level 3 fair value measurements using significant unobservable inputs, a reporting entity should present separately information about purchases, sales, issuances, and settlements.

 

In addition, ASU 2010-06 clarifies the requirements of the following existing disclosures:

 

·                  For purposes of reporting fair value measurement for each class of assets and liabilities, a reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities; and

 

·                  A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements.

 

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** **

**CHASE PACKAGING CORPORATION**

**(A Development Stage Company)**

**NOTES TO FINANCIAL STATEMENTS**

**DECEMBER 31, 2010 AND 2009**

 

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

 

***Fair Value Measurements (continued):***

 

ASU 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. Early adoption is permitted. The adoption of the first part of the guidance had no material effect on the Company’s financial position, results of operations, or cash flows. The guidance related to presentation of Level 3 fair value measurements is not expected to have a material effect on the Company’s financial position, results of operations, or cash flows.

 

**Subsequent Events**

 

The Company has also adopted the provisions of the FASB ASU 2010-09, Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements. The amendments in the ASU remove the requirement for an SEC filer to disclose a date through which subsequent events have been evaluated in both issued and revised financial statements. Revised financial statements include financial statements revised as a result of either correction of an error or retrospective application of U.S. GAAP. The FASB also clarified that if the financial statements have been revised, then an entity that is not an SEC filer should disclose both the date that the financial statements were issued or available to be issued and the date the revised financial statements were issued or available to be issued. The FASB believes that these amendments remove potential conflicts with the SEC’s literature.

 

In addition, the amendments in the ASU require an entity that is a conduit bond obligor for conduit debt securities that are traded in a public market to evaluate subsequent events through the date of issuance of its financial statements and must disclose such date. This guidance was effective immediately. The adoption of this guidance had no material effect on the Company’s financial position, results of operations, or cash flows.

 

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

 

No current provision for Federal income taxes was required for the years ended December 31, 2010 and 2009, due to the Company’s operating losses.  At December 31, 2010 and 2009, the Company had unused net operating loss carry-forwards of approximately $1,700,000 and $3,600,000 which expire at various dates through 2030.  Most of this amount is subject to annual limitations under certain provisions of the Internal Revenue Code related to “changes in ownership.”

 

As of December 31, 2010 and 2009, the deferred tax assets related to the aforementioned carry-forwards have been fully offset by valuation allowances, since it is more likely than not that significant utilization of such amounts will not occur in the foreseeable future. During 2010, approximately $1,900,000 of net operating loss-carry forwards expired.

 
| ** **                                                 | ** ** | **2010**     | ** **  | **2009**       | ** ** |
|------------------------------------------------------------|------------|--------------|-------------|----------------|------------|
| Deferred tax assets and valuation allowances   consist of: | ** ** | ** **   | ** **  | ** **     | ** ** |
| ** **                                                 | ** ** | ** **   | ** **  | ** **     | ** ** |
| Deferred tax assets:                                       | ** ** | ** **   | ** **  | ** **     | ** ** |
| Net operating loss carry forwards                          | ** ** | **$**        | **682,000** | ** **     | **$**      | **1,242,000** | ** ** |
| ** **                                                 | ** ** | ** **   | ** **  | ** **     | ** ** |
| Less valuation allowance                                   | ** ** | **(682,000** | **)**       | **(1,242,000** | **)**      |
| Net deferred tax assets                                    | ** ** | **$**        | **—**  | ** **     | **$**      | **—** | ** ** |

 

We file income tax returns in the U.S. Federal and Texas state jurisdictions. Tax years for fiscal 2007 through 2010 are open and potentially subject to examination by the Federal and Texas state taxing authorities.

 

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**CHASE PACKAGING CORPORATION**

**(A Development Stage Company)**

**NOTES TO FINANCIAL STATEMENTS**

**DECEMBER 31, 2010 AND 2009**

 

**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 total subscribed amount of $2,000,100. Each Unit consists of: (1) one share of Series A 10% convertible preferred stock, par value $1.00, stated value $100 (the “Preferred Stock”); (2) 500 shares of the Company’s common stock, par value $0.10 (the “Common Stock”); and (3) 500 warrants (the “Warrants”) exercisable into the Common Stock on a one-for-one basis.

 

Each warrant contained in a Unit has a term of five years during which such warrant may be exercised, at $0.15 per share, for one share of Common Stock. A total of 6,605 Units were purchased by related parties, including significant shareholders. The exercise price of the Warrants is subject to adjustment to reflect recapitalizations, stock dividends, mergers, stock splits, and similar events that would otherwise dilute the relative number of shares of Common Stock into which the Warrants may be exercised.

 

Each share of Preferred Stock contained in a Unit has a stated value of $100 and is convertible at any time into Common Stock at a rate of $0.10 per share. The conversion price of the Preferred Stock is subject to adjustment to reflect recapitalizations, stock dividends, mergers, stock splits, and similar events that would otherwise dilute the relative number of shares of Common Stock into which the Preferred Stock may be converted.

 

There are 4,000,000 shares of Preferred Stock currently authorized for issuance. At the discretion of the Company’s Board of Directors, the Company may pay to the holders of the Preferred Stock a semi-annual dividend of ten percent payable in cash or in kind (i.e., in additional shares of Preferred Stock) or any combination thereof. The holder of each share of Preferred Stock will have one vote for each underlying share of Common Stock as if such Preferred Stock had been converted. At any time prior to conversion, the Company’s Board of Directors 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 a liquidation value of $100 per share. At any time after August 2, 2011, the holders of 66 2/3% or more of the shares of Preferred Stock then outstanding may request the liquidation of their Preferred Stock. In the event that, at the time of such requested liquidation, the Company’s cash funds (in excess of a $50,000 reserve fund) then available to effect such liquidation are inadequate for such purpose, the requested liquidation shall take place (on a pro-rata basis) only to the extent such excess cash funds are available for such purpose. In the event of a merger transaction approved by the holders of the Common Stock, the holders of the Preferred Stock will have the right to a cash payment of $100 per share in connection with such merger, or the Preferred Stock will be automatically converted at the then applicable conversion rate.  There was no beneficial conversion feature recorded as the Common Stock was selling for less than $0.10 per share at the time of the closing which approximates fair value.

 

Legal and professional fees of approximately $38,000 were incurred in connection with this private placement transaction resulting in net proceeds of approximately $1,962,000.

 

**NOTE    5  -****                           ****DIVIDENDS:**

 

On November 2, 2009, the Company announced that the Board of Directors had declared a ten percent stock dividend on its outstanding Series A 10% Convertible Preferred Stock.  Shareholders of record as of November 16, 2009 received the stock dividend 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 total dividend paid consisted of 1,542 shares of Series A Preferred Stock with a fair 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 $2,702 was charged against Additional Paid-in Capital.

 

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**CHASE PACKAGING CORPORATION**

**(A Development Stage Company)**

**NOTES TO FINANCIAL STATEMENTS**

**DECEMBER 31, 2010 AND 2009**

 

**NOTE    5   -****                        ****DIVIDENDS (continued):**

 

On November 1, 2010, the Company announced that the Board of Directors had declared a ten percent stock dividend on its outstanding Series A 10% Convertible Preferred Stock.  Shareholders of record as of November 15, 2010 received the stock dividend for each share of Series A Preferred Stock owned on that date, payable December 1, 2010.  As of November 1, 2010, the Company had 17,078 shares of Preferred Stock outstanding; the total dividend paid consisted of 1,697 shares of Series A Preferred Stock with a fair value of $169,700 and $1,180 cash in lieu of fractional shares.  Due to the absence of Retained Earnings, the $1,180 of cash and $1,697 par value of Preferred Stock dividend totaling $2,877 was charged against Additional Paid-in Capital.

 

**NOTE   6   -****                           ****SHAREHOLDERS’ EQUITY:**

 

The Company’s 2008 Stock Awards Plan (the “2008 Plan”) was approved at the Company’s annual meeting of shareholders held on June 3, 2008.  The 2008 Plan became effective April 9, 2008 and will terminate on April 8, 2018.  Subject to certain adjustments, the number of shares of Common Stock that may be issued pursuant to awards under the 2008 Plan is 2,000,000 shares.  A maximum of 80,000 shares may be granted in any one year in any form to any one participant, of which a maximum of (i) 50,000 shares may be granted to a participant in the form of stock options and (ii) 30,000 shares may be granted to a participant in the form of Common Stock or restricted stock.  The 2008 Plan will be administered by a committee of the Board of Directors.  Employees, including any employee who is also a director or an officer, consultants, and outside directors of the Company are eligible to participate in the 2008 Plan. As of December 31, 2010 no options had been issued under the 2008 Plan.

 

**NOTE   7   -****                           ****FAIR VALUE MEASUREMENTS:**

 

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

 

Under ASC 820, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market. ASC 820 establishes a hierarchy in determining the fair value of an asset or liability. The fair value hierarchy has three levels of inputs, both observable and unobservable. ASC 820 requires the utilization of the lowest possible level of input to determine fair value. Level 1 inputs include quoted market prices in an active market for identical assets or liabilities. Level 2 inputs are market data, other than Level 1, that are observable either directly or indirectly. Level 2 inputs include quoted market prices for similar assets or liabilities, quoted market prices in an inactive market, and other observable information that can be corroborated by market data. Level 3 inputs are unobservable and corroborated by little or no market data.

 

Except for those assets and liabilities which are required by authoritative accounting guidance to be recorded at fair value in the Company’s Balance Sheets, the Company has elected not to record any other assets or liabilities at fair value, as permitted by ASC 820. No events occurred during the year ended December 31, 2010 which would require adjustment to the recognized balances of assets or liabilities which are recorded at fair value on a nonrecurring basis.

 

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**CHASE PACKAGING CORPORATION**

**(A Development Stage Company)**

**NOTES TO FINANCIAL STATEMENTS**

**DECEMBER 31, 2010 AND 2009**

 

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

 

The Company determines fair values for its investment assets as follows:

 

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

 

The following tables provide information on those assets and liabilities measured at fair value on a recurring basis as of December 31, 2010 and 2009, respectively.

 
| ** **         | ** ** | **Carrying Amount****Amount ****In********Balance Sheet********December 31,** | ** ** | **Fair Value********December 31,** | ** ** | **Fair Value Measurement Using** | ** ** |
|--------------------|------------|---------------------------------------------------------------------------------------------------|------------|----------------------------------------------|------------|-------------------------------------------------|------------|
| ** **         | ** ** | **2010**                                                                                          | ** ** | **2010**                                     | ** ** | **Level 1**                                | ** ** | **Level 2** | ** ** | **Level 3** | ** ** |
| Assets:            |       |                                                                                              |       |                                         |       |                                            |       |   |   |   |   |
| Money Market Funds |       | $                                                                                                 | 1,570,000  |                                         | $          | 1,570,000                                       |       | $ | 1,570,000 |   | $ | — |   | $ | — |   |
|                    |            |                                                                                                   |            |                                              |            |                                                 |            |  |  |  |  |  |  |  |  |  |

 
| ** **         | ** ** | **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 |   | $ | — |   | $ | — |   |

 

**NOTE 8   -****                                 ****COMMITMENTS AND CONTINGENCIES:**

 

The Company’s Board of Directors has agreed to pay the Company’s Chief Financial Officer an annual salary of $17,000.  No other officers or directors of the Company receive compensation other than reimbursement of out-of-pocket expenses incurred in connection with Company business and development.

 

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

 

None.

 

**ITEM 9A(T).**      **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 and accounting officer, 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 Exchange Act, as of the end of the period covered by this report.  Based on this evaluation, our principal executive officer and principal financial and accounting officer concluded that, as of the end 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.

 

**Management’s Annual Report on Internal Control over Financial Reporting**

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, the principal executive officer and principal financial and accounting officer and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

 

Our evaluation of internal control over financial reporting includes using the COSO framework, an integrated framework for the evaluation of internal controls issued by the Committee of Sponsoring Organizations of the Treadway Commission, to identify the risks and control objectives related to the evaluation of our control environment.

 

Our management has concluded that our internal control over financial reporting was effective as of December 31, 2010.

 

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.

 

**ITEM 9B.**      **OTHER INFORMATION.**

 

None.

 

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**PART III**

 

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

 

The information required by Item 10 of Form 10-K is hereby incorporated by reference from the earlier filed of (i) an amendment to this annual report on Form 10-K or (ii) the Company’s definitive proxy statement, which will be filed pursuant to Regulation 14A within 120 days after the Company’s year end for the year covered by this report.

 

**ITEM 11.****                     ****EXECUTIVE COMPENSATION.**

 

The information required by Item 11 of Form 10-K is hereby incorporated by reference from the earlier filed of (i) an amendment to this annual report on Form 10-K or (ii) the Company’s definitive proxy statement, which will be filed pursuant to Regulation 14A within 120 days after the Company’s year end for the year covered by this report.

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

 

The information required by Item 12 of Form 10-K is hereby incorporated by reference from the earlier filed of (i) an amendment to this annual report on Form 10-K or (ii) the Company’s definitive proxy statement, which will be filed pursuant to Regulation 14A within 120 days after the Company’s year end for the year covered by this report.

 

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

 

The information required by Item 13 of Form 10-K is hereby incorporated by reference from the earlier filed of (i) an amendment to this annual report on Form 10-K or (ii) the Company’s definitive proxy statement, which will be filed pursuant to Regulation 14A within 120 days after the Company’s year end for the year covered by this report.

 

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

 

The information required by Item 14 of Form 10-K is hereby incorporated by reference from the earlier filed of (i) an amendment to this annual report on Form 10-K or (ii) the Company’s definitive proxy statement, which will be filed pursuant to Regulation 14A within 120 days after the Company’s year end for the year covered by this report.

 

**PART IV**

 

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

 

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

 

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

 

(2)          Financial Statement Schedules included in Item 8 herein:

 

All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore, have been omitted.

 

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

 

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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.                                                                                                                                                                                                         |

 

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*filed herewith

 

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**SIGNATURES**

 

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

 
|                      | **CHASE PACKAGING CORPORATION** |
|---------------------------|---------------------------------|
|                      |                            |
|                      |                            |
| Date: March 31, 2011 |   By:                 | /s/   Allen T. McInnes |
|                      |                            | Allen T. McInnes |
|                      |                            | Chairman of the Board, President and Treasurer |

 

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

 

 
| Date:  March 31, 2011 | By:    | /s/   Allen T. McInnes                            |
|---------------------------------|--------|---------------------------------------------------|
|                            |   | Allen   T. McInnes                                |
|                            |   | Chairman   of the Board, President and Treasurer  |
|                            |   |                                              |
|                            |   |                                              |
| Date:  March 31, 2011 | By:    | /s/   Ann C.W. Green                              |
|                            |   | Ann   C. W. Green                                 |
|                            |   | Chief   Financial Officer and Assistant Secretary |
|                            |   |                                              |
|                            |   |                                              |
| Date:  March 31, 2011 | By:    | /s/   Herbert M. Gardner                          |
|                            |   | Herbert   M. Gardner                              |
|                            |   | Vice   President and Director                     |
|                            |   |                                              |
|                            |   |                                              |
| Date:  March 31, 2011 | By:    | /s/   William J. Barrett                          |
|                            |   | William   J. Barrett                              |
|                            |   | Secretary   and Director                          |
|                            |   |                                              |
|                            |   |                                              |
| Date:  March 31, 2011 | By:    | /s/   Edward L. Flynn                             |
|                            |   | Edward   L. Flynn                                 |
|                            |   | Director                                          |
|                            |   |                                              |
|                            |   |                                              |
| Date:  March 31, 2011 | By:    | /s/   Wayne Whitener                              |
|                            |   | Wayne   Whitener                                  |
|                            |   | Director                                          |

 

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