**UNITEDSTATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 10-KSB**

 

**ANNUAL REPORT UNDER SECTION 13OR 15(d)**

**OF THE SECURITIES EXCHANGE ACT OF1934**

 
| **For the fiscal year ended  December 31, 2007** | ** ** | **Commission  File Number 0-21609** |
|-------------------------------------------------------|------------|-------------------------------------|

 

**CHASE PACKAGING CORPORATION**

(Exact name of registrant as specified in its charter)

 

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

 

**636 River Road**

**Fair Haven, NJ  07704**

(Address of principalexecutive offices) (Zip Code)

 

**(732) 741-1500**

(Registrant’s telephonenumber, including area code)

 

Securitiesregistered pursuant to Section 12 (b) of the Act:  **None**

Securitiesregistered pursuant to Section 12 (g) of the Act:  **Common Stock, $.10 par value**

 

Check whether the registrantis not required to file reports pursuant to Section 13 or 15(d) ofthe Exchange Act.   o

 

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

 

Check if there isno disclosure of delinquent filers in response to Item 405 of Regulation S-Bcontained in this form and no disclosure will be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statementsincorporated by reference in Part III of this Form 10-KSB or anyamendment to this Form 10-KSB.  x

 

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

Yes x  No o

 

Registrant’srevenues for the most recent fiscal year - $0

The aggregatemarket value of voting and non-voting common stock held by non-affiliates ofthe registrant as of March 28, 2008 was $1,761,522.

 

As of March 28,2008, the registrant had outstanding 15,536,275 shares of Common Stock ($.10par value).

 

 

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### **PART I**

### ** **

**ITEM 1. DESCRIPTION OF BUSINESS.**

 

ChasePackaging Corporation (“Chase” or the “Company”), is a Texas corporation which,prior to 1998, was engaged in the specialty packaging business, primarily as asupplier of packaging products to the agricultural industry.  During 1997, the Company commenced an orderlyliquidation of its assets (described below) which was completed in 1997.  At present, management of the Company isseeking to secure a suitable merger partner wishing to go public or attempt toacquire private companies to create investment value for the Company.  For purposes of Rule 12b-2 of theExchange Act, the Company is considered a shell company.

 

#### **History**

#### ** **

PriorBusiness Operations

 

TheCompany was established in July of 1993 as a wholly-owned subsidiary ofTGC Industries, Inc. (“TGC”). On July 30, 1993, the Company purchasedcertain assets of Union Camp Corporation’s packaging division for a purchaseprice of approximately $6.14 million. The assets purchased included substantially all of the business ofweaving and constructing Saxolin® paper mesh and polypropyleneplastic mesh bagging material for agricultural and industrial applications andsubstantially all of the properties related to Union Camp’s packaging division.The properties acquired by Chase consisted of Union Camp’s plant facilitieslocated in Portland, Oregon, and Idaho Falls, Idaho, and all machinery,equipment, and inventories connected with these facilities.

 

TheCompany experienced losses from 1994 through 1997, and in 1997 the Company’ssecured lender decided not to renew the Company’s operating line ofcredit.  The Company’s Board of Directorstherefore determined that it was in the best interest of the Company and all ofits creditors to liquidate in an orderly fashion.

 

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

 

OnJuly 25, 1997, the Company notified its creditors by mail that the Companywould begin an orderly liquidation of all of its remaining assets, outside of aformal bankruptcy or receivership proceeding, in a manner intended to maximizethe asset values. The Company retained the firm of Edward Hostmann, Inc.to assist the Company in such liquidation which was completed during 1997.

 

Post-LiquidationOperations

 

Since 1999, the Board ofDirectors has devoted its efforts to establishing a new business or engaging ina merger or other reorganization transaction and, accordingly, the Company isbeing treated as a development stage company in accordance with Statement ofFinancial Accounting Standards No. 7, effective January 1, 1999.

 

The Company closed a private placement of 13,334 Units on September 7,2007.  Each Unit was sold for  $150 and consisted of:  one share of Series A 10% Convertible Preferred Stock ($100 statedvalue) convertible into 1,000 shares of the Company’s common stock (the “CommonStock”); 500 shares of Common Stock; and 500 five year warrants, each warrantexercisable for one share of Common Stock at $0.15 per share.  Gross proceeds from the offering were$2,000,100, expenses of the offering were approximately $39,000, and netproceeds were approximately $1,961,100.

 

2

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**ITEM 2.  DESCRIPTION OF PROPERTY.**

 

The Company neither rents nor owns any properties.  The Company utilizes the office space andequipment of its management at no cost. Management estimates such amounts to be immaterial.  The Company currently has no policy withrespect to investment or interests in real estate, real estate mortgages, orsecurities of, or interests in, persons primarily engaged in real estateactivities.

 

**ITEM 3.  LEGALPROCEEDINGS.**

 

None.

 

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

 

Nomatters were submitted by the Company during the fourth quarter of the fiscalyear ended December 31, 2007 for a vote of the Company’s security holders,through the solicitation of proxies or otherwise.

 

3

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##### **PART II**

##### ** **

**ITEM 5. MARKET FOR COMMON EQUITY; RELATED STOCKHOLDER MATTERS AND SMALLBUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.**

** **

TheCompany’s Common Stock trades in the Pink Sheets under the symbol “CPKA.”  American Stock Transfer and Trust Company hasdetermined that there were approximately 379 holders of record on December 31,2007.  Trading volume in the Company’ssecurities has been nominal.  The lastreported bid and ask prices on December 31, 2007 were $0.19 and $0.30,respectively, and the last trade was $0.20.

 

Highand low stock prices for the Company’s Common Stock in the two years ended December 31,2007 and December 31, 2006 are displayed in the following table:

 
| ** **             | ** ** | **2007 Market Price** | ** ** | **2006 Market Price** | ** ** |
|------------------------|------------|---------------------------------|------------|---------------------------------|------------|
| **Quarter Ended** | ** ** | **High**                        | ** ** | **Low**                         | ** ** | **High** | ** ** | **Low** | ** ** |
|                   |       |                            |       |                            |       |   |   |   |   |
| March 31          |       | $                               | 0.08       |                            | $          | 0.05 |   | $ | 0.02 |   | $ | 0.00 |   |
| June 30           |       | $                               | 0.08       |                            | $          | 0.08 |   | $ | 0.10 |   | $ | 0.10 |   |
| September 30      |       | $                               | 0.20       |                            | $          | 0.08 |   | $ | 0.01 |   | $ | 0.00 |   |
| December 31       |       | $                               | 0.25       |                            | $          | 0.20 |   | $ | 0.05 |   | $ | 0.05 |   |

 

TheCompany has never paid cash dividends on its shares of Common Stock and doesnot anticipate the payment of dividends on its shares of Common Stock in theforeseeable future.

 

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

** **

**Results of operations**

 

**During 2007, the Company had nooperations and its only income was from interest income on its short-terminvestments which are classified as cash and cash equivalents.  General and administrative expenses were$51,114 in fiscal 2007 compared to $10,300 in fiscal 2006. The increase of$40,814 was primarily due to increased professional fees. The Company hadfiscal 2007 interest income of $23,087 and a net loss of $32,227, compared withinterest income of $108 and a net loss of $12,707 for fiscal 2006.**

** **

**Commencing November 1, 2007,the Company’s Board of Directors agreed to pay the Company’s Chief FinancialOfficer an annual salary of $17,000.  Noother officers or directors of the Company receive compensation other thanreimbursement of out-of-pocket expenses incurred in connection with Companybusiness and development.**

** **

Dueto the closing of a private placement of the Company’s securities in the thirdquarter of 2007, the Company’s cash and cash equivalents balance as of December 31,2007 was $1,960,333 compared with $2,691 for 2006***.***  The proceeds from the 2007 private placementwill assist management with its plans to secure a suitable merger partnerwishing to go public or attempt to acquire private companies to createinvestment value for the Company.

 

**Liquidity and Capital Resources**

 

AtDecember 31, 2007, the Company had cash and cash equivalents ofapproximately $1,960,000.  Cash and cash equivalents consist of cashheld in banks and brokerage firms.    Working capital at December 31,2007 was approximately $1,941,000.  Management believes that its cashand cash equivalents are sufficient for its business activities for at leastthe next 12 months and for the costs of seeking an acquisition of an operatingbusiness.

 

4

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Netcash of approximately $14,200 was used in operations during fiscal 2007, anincrease of approximately $700 over the $13,500 used in operations duringfiscal 2006.  This increase resulted primarily from increasedinternal expenses associated with the private placement consummated in September of2007.

 

Nocash flows were used or provided by investing activities for each of theperiods presented.

 

Netcash of approximately $1,972,000 was provided by financing activities duringfiscal 2007, an increase of approximately $1,957,000 over the $15,000 providedby financing activities during fiscal 2006.  The Company receivedapproximately $2,000,000 of cash from the sale of Units in the privateplacement in fiscal 2007.  The Companydid not receive any cash proceeds from the sale of Common Stock or other equityinstruments in fiscal 2006.

 

**New Authoritative Pronouncements**

 

See Note 2, “Summary of Significant Accounting Policies,” in the notesto the financial statements in Item 7 for a full description of recently issuedaccounting pronouncements, including the expected dates of adoption andestimated effects on results of operations and financial condition, which isincorporated herein.

 

**Factors Which May Affect Future Results**

 

Futureearnings of the Company are dependent on interest rates earned on the Company’sinvested balances and expenses incurred. The Company expects to incursignificant expenses in connection with its objective of identifying  a merger partner or acquiring an operatingbusiness.

 

**Risk Factors**

 

*The expenses related to identifying a target business and tocomplete a business combination will increase the losses of the Company.*

 

Untilpresented with a specific opportunity for a business combination, the Companywill be unable to ascertain with any degree of certainty the time and costsrequired to select and evaluate a target business and to structure and completethe business combination.  Any costs incurred in connection with theidentification and evaluation of a prospective target business with which abusiness combination is not ultimately completed will result in a loss to theCompany and reduce the amount of capital otherwise available to complete abusiness combination and thereafter operate the acquired business.  TheCompany cannot provide assurance that it will be successful in identifying atarget business and completing a business combination on terms favorable to itsshareholders, if at all.

 

*The tax treatment of a potential business combination is notclear.*

 

TheCompany will endeavor to structure a business combination so as to achieve themost favorable tax treatment to it and to the target business and theshareholders of both companies.  The Company cannot provide assurance thatthe Internal Revenue Service or appropriate state tax authorities will agreewith the Company’s tax treatment of the business combination.

 

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

 

Althoughthe Company intends to carefully scrutinize the management of a prospectivetarget business before effecting a business combination, it cannot assure youthat its assessment of the target’s management will prove to becorrect.  In addition, the Company cannot assure you that the target’sfuture management will have the necessary skills, qualifications, or abilitiesto manage a public company.  Furthermore, the future role of theCompany’s officers and directors, if any, in the target business cannotpresently be stated with any certainty.  While it is possible thatone or more of the Company’s officers and directors will remain associated insome capacity following a business combination, it is uncertain whether all ofthem will devote their full efforts to the Company’s affairs after a businesscombination.  Moreover, the Company cannot assure you that itsofficers and directors will have significant experience or knowledge relatingto the operations of the particular target business.

 

5

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TheCompany may seek to recruit additional management personnel to supplement theincumbent management of the target business. The Company cannot assure you,however, that it will be able to recruit additional managers who have therequisite skills, knowledge, or experience necessary to enhance the incumbentmanagement and successfully operate the target business.

 

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

 

TheCompany may encounter intense competition from other entities seeking tocombine with a privately held operating company.  Many of these entities, including financialconsulting companies and venture capital firms, have longer operating historiesand have extensive experience in identifying and effecting businesscombinations.  Many of these competitors also possess significantlygreater financial, technical, and other resources than does theCompany.  The Company cannot assure you that it will be able toeffectively compete with these entities. Consequently, the Company may acquirea company with less favorable prospects then it would otherwise prefer, thusmaking its long-term prospects for success less likely.

 

Ifthe Company effects a business combination, it will become subject tocompetition from the competitors of the acquired business.  Inparticular, industries that experience rapid growth frequently attract largernumbers of competitors, including competitors with greater financial,marketing, technical, and other resources than the Company.  TheCompany cannot ascertain the level of competition it will face if it effects abusiness combination, and it cannot assure you that it will be able to competesuccessfully with these competitors.

 

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

 

OurCommon Stock is quoted on the Pink Sheets under the symbol “CPKA.”  ThePink Sheets, and the price of our Common Stock, are characterized by highvolatility.  The Company cannot guarantee any market for its sharesof Common Stock, and cannot guarantee that any stable market for its shares ofCommon Stock will develop or be sustained.  The Company cannotpredict the effect, if any, that our business activities or a businesscombination might have on the market price.

 

6

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**ITEM 7.  FINANCIAL STATEMENTS.**

** **

**CHASEPACKAGING CORPORATION**

**FORTHE YEARS ENDED DECEMBER 31, 2007 AND 2006**

 

**- INDEX TO FINANCIAL STATEMENTS -**

 
| ** **                                        | ** ** | **Page(s)**  |
|---------------------------------------------------|------------|--------------|
|                                              |       |         |
| Independent  Auditors’ Report                |       | 8            |
|                                              |       |         |
| Financial Statements:                             |       |         |
|                                              |       |         |
| Balance Sheets                                    |       | 9            |
|                                              |       |         |
| Statements of  Operations                         |       | 10           |
|                                              |       |         |
| Statements of Shareholders’ Equity (Deficit) |       | 11 – 12 |
|                                              |       |         |
| Statements  of Cash Flows                         |       | 13           |
|                                              |       |         |
| Notes  to Financial Statements.                   |       | 14 – 17 |

 

7

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**INDEPENDENTAUDITORS’ REPORT**

 

To TheShareholders

Chase PackagingCorporation

 

We have auditedthe accompanying balance sheets of Chase Packaging Corporation (A DevelopmentStage Company) as of December 31, 2007 and 2006 and the related statementsof operations, shareholders’ equity (deficit) and cash flows for thedevelopment stage period (from January 1, 1999 to December 31, 2007).These financial statements are the responsibility of the Company’smanagement.  Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted ouraudits in accordance with the standards of the Public Company AccountingOversight Board (United States). Those standards require that we plan andperform the audits to obtain reasonable assurance about whether the financialstatements are free of material misstatement. The Company is not required tohave, nor were we engaged to perform, an audit of its internal control overfinancial reporting. Our audits included consideration of internal control overfinancial reporting as a basis for designing audit procedures that areappropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the Company’s internal control over financialreporting. Accordingly, we express no such opinion. An audit also includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements, assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation.  Webelieve that our audits provide a reasonable basis for our opinion.

 

Inour opinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Chase Packaging Corporation as of December 31,2007 and 2006, and the results of its operations and its cash flows for thedevelopment stage period from January 1, 1999 to December 31, 2007 inconformity with accounting principles generally accepted in the United Statesof America.

 

 
|                |   | /s/ **LAZAR LEVINE & FELIX LLP** |
|---------------------|--------|-------------------------------------------|
|                |   |                                      |
|                |   |                                      |
| New York, New York  |   |                                      |
| March 21, 2008 |   |                                      |

 

8

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**CHASE PACKAGING CORPORATION**

**(A Development Stage Company)**

**BALANCESHEETS**

## **ASOF DECEMBER 31, 2007 AND 2006**

 
| ** **                                                                                                                           | ** ** | **2007**       | ** **    | **2006**   | ** ** |
|--------------------------------------------------------------------------------------------------------------------------------------|------------|----------------|---------------|------------|------------|
|                                                                                                                                 |       |           |          |       |       |
| **-  ASSETS -**                                                                                                                      |       |
| **CURRENT  ASSETS:**                                                                                                                 |       |           |          |       |       |
| Cash and cash  equivalents                                                                                                           | ** ** | **$**          | **1,960,333** |       | $          | 2,691 |   |
|                                                                                                                                 |       |           |          |       |       |
| **TOTAL  ASSETS**                                                                                                                    | ** ** | **$**          | **1,960,333** |       | $          | 2,691 |   |
|                                                                                                                                 |       |           |          |       |       |
| **-  LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) -**                                                                         | ** ** |
| ** **                                                                                                                           | ** ** | ** **     | ** **    | ** ** | ** ** |
| **CURRENT  LIABILITIES:**                                                                                                            |       |           |          |       |       |
| Accrued expenses                                                                                                                     | ** ** | **$**          | **18,607**    |       | $          | 8,696 |   |
| Convertible  notes payable - related party                                                                                           | ** ** | **—**     |          | 47,000     |       |
| **TOTAL  CURRENT LIABILITIES**                                                                                                       | ** ** | **18,607**     |          | 55,696     |       |
|                                                                                                                                 |       |           |          |       |       |
| **COMMITMENTS  AND CONTINGENCIES**                                                                                                   |       |           |          |       |       |
|                                                                                                                                 |       |           |          |       |       |
| **SHAREHOLDERS’  EQUITY (DEFICIT):**                                                                                            |       |           |          |       |       |
| Preferred stock,  $1.00 par value; 4,000,000 shares authorized; Series A 10% Convertible;  13,818 shares issued and outstanding |       | **13,818**     |          | —     |       |
| Common stock,  $.10 par value 25,000,000 shares authorized; 15,536,275 and 8,627,275 shares  issued and outstanding, respectively    |       | **1,553,628**  |          | 862,728    |       |
| Additional  paid-in capital                                                                                                          | ** ** | **4,087,515**  |          | 2,757,275  |       |
| Common stock  subscribed                                                                                                             | ** ** | **—**     |          | 8,000      |       |
| Accumulated  deficit                                                                                                                 | ** ** | **(3,626,121** | **)**         | (3,626,121 | )          |
| Deficit  accumulated during the development stage                                                                                    | ** ** | **(87,114**    | **)**         | (54,887    | )          |
| **TOTAL  SHAREHOLDERS’ EQUITY (DEFICIT)**                                                                                       | ** ** | **1,941,726**  |          | (53,005    | )          |
| ** **                                                                                                                           |       |           |          |       |       |
| **TOTAL  LIABILITIES AND SHAREHOLDERS’ EQUITY**                                                                                 | ** ** | **$**          | **1,960,333** |       | $          | 2,691 |   |

 

See notes tofinancial statements.

 

9

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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, 2007**                                                             | ** **  | **2007**                                                 | ** ** | **2006** | ** ** |
|                                                                     |       |                                                                                        |        |                                                     |       |   |   |
| **NET  SALES**                                                           | ** ** | **$**                                                                                       | **—**  | ** **                                               | **$**      | **—** |   | $ | — |   |
|                                                                     |       |                                                                                        |        |                                                     |       |   |   |
| **COSTS  AND EXPENSES:**                                                 |       |                                                                                        |        |                                                     |       |   |   |
|                                                                     |       |                                                                                        |        |                                                     |       |   |   |
| General and  administrative expense                                      | ** ** | **102,840**                                                                                 | ** **  | **51,114**                                               |       | 10,300 |   |
|                                                                     |       |                                                                                        |        |                                                     |       |   |   |
| **LOSS  FROM OPERATIONS**                                                | ** ** | **(102,840**                                                                                | **)**       | **(51,114**                                              | )          | (10,300 | ) |
|                                                                     |       |                                                                                        |        |                                                     |       |   |   |
| **OTHER  INCOME (EXPENSE)**                                              |       |                                                                                        |        |                                                     |       |   |   |
|                                                                     |       |                                                                                        |        |                                                     |       |   |   |
| Interest expense                                                         | ** ** | **(8,591**                                                                                  | **)**       | **(4,200**                                               | )          | (2,515 | ) |
| Interest and  other income                                               | ** ** | **24,317**                                                                                  | ** **  | **23,087**                                               |       | 108 |   |
|                                                                     |       |                                                                                        |        |                                                     |       |   |   |
| **TOTAL  OTHER INCOME (EXPENSE)**                                        | ** ** | **15,726**                                                                                  | ** **  | **18,887**                                               |       | (2,407 | ) |
|                                                                     |       |                                                                                        |        |                                                     |       |   |   |
| **LOSS  BEFORE INCOME TAXES**                                            | ** ** | **(87,114**                                                                                 | **)**       | **(32,227**                                              | )          | (12,707 | ) |
|                                                                     |       |                                                                                        |        |                                                     |       |   |   |
| Provision for  income taxes                                              | ** ** | **—**                                                                                  | ** **  | **—**                                               |       | — |   |
|                                                                     |       |                                                                                        |        |                                                     |       |   |   |
| **NET  LOSS**                                                            | ** ** | **$**                                                                                       | **(87,114** | **)**                                                    | **$**      | **(32,227** | ) | $ | (12,707 | ) |
|                                                                     |       |                                                                                        |        |                                                     |       |   |   |
| **BASIC  AND DILUTED LOSS PER COMMON SHARE**                             | ** ** | ** **                                                                                  |        | **$**                                                    | **—** |   | $ | — |   |
| **WEIGHTED  AVERAGE COMMON SHARES OUTSTANDING – BASIC AND DILUTED** |       |                                                                                        |        | 10,804,083                                               |       | 8,627,275 |   |

 

See notes tofinancial statements.

 

10

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**CHASEPACKAGING CORPORATION**

**(A Development Stage Company)**

## **STATEMENTSOF SHAREHOLDERS’ EQUITY (DEFICIT)**

 
| ** **                                            | ** ** | **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 | ) |
|                                                       |            |                          |            |                       |            |                               |            |                   |            |                 |            |                                                        |            |             |            |  |  |  |  |  |  |  |  |  |  |  |

 

See notes tofinancial statements.

 

11

----

 
| ** **                                          | ** ** | **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 |   |
|                                                     |            |                          |            |                       |            |                               |            |                   |            |                 |            |                                                        |            |             |            |  |  |  |  |  |  |  |  |  |  |  |

 

See notes tofinancial statements.

 

12

----

** **

**CHASEPACKAGING 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, 2007)**                                                            | ** **    | **2007**                                                 | ** ** | **2006** | ** ** |
|                                                                                                                   |       |                                                                                        |          |                                                     |       |   |   |
| **CASH  FLOWS FROM OPERATING ACTIVITIES:**                                                                             |       |                                                                                        |          |                                                     |       |   |   |
| Net loss                                                                                                               | ** ** | **$**                                                                                       | **(87,114**   | **)**                                                    | **$**      | **(32,227** | ) | $ | (12,707 | ) |
|                                                                                                                   |       |                                                                                        |          |                                                     |       |   |   |
| **Change  in assets and liabilities:**                                                                                 |       |                                                                                        |          |                                                     |       |   |   |
| Accrued expenses                                                                                                       | ** ** | **3,428**                                                                                   | ** **    | **18,011**                                               |       | (788 | ) |
| **Net  cash used in operating activities**                                                                             | ** ** | **(83,686**                                                                                 | **)**         | **(14,216**                                              | **)**      | (13,495 | ) |
|                                                                                                                   |       |                                                                                        |          |                                                     |       |   |   |
| **CASH FLOWS  FROM INVESTING ACTIVITIES**                                                                              | ** ** | **—**                                                                                  | ** **    | **—**                                               |       | — |   |
|                                                                                                                   |       |                                                                                        |          |                                                     |       |   |   |
| **CASH  FLOWS FROM FINANCING ACTIVITIES**                                                                              |       |                                                                                        |          |                                                     |       |   |   |
| Proceeds from  convertible debt                                                                                        | ** ** | **56,500**                                                                                  | ** **    | **9,500**                                                |       | 15,000 |   |
| Proceeds from  private placement/exercise of stock warrants                                                            | ** ** | **5,500**                                                                                   | ** **    | **—**                                               |       | — |   |
| Capital contribution                                                                                                   | ** ** | **8,000**                                                                                   | ** **    | **—**                                               |       | — |   |
| Proceeds from  private placement                                                                                       | ** ** | **1,962,358**                                                                               | ** **    | **1,962,358**                                            |       | — |   |
| **Net  cash provided by financing activities**                                                                         | ** ** | **2,032,358**                                                                               | ** **    | **1,971,858**                                            |       | 15,000 |   |
|                                                                                                                   |       |                                                                                        |          |                                                     |       |   |   |
| **NET  INCREASE IN CASH EQUIVALENTS**                                                                                  | ** ** | **1,948,672**                                                                               | ** **    | **1,957,642**                                            |       | 1,505 |   |
|                                                                                                                   |       |                                                                                        |          |                                                     |       |   |   |
| Cash and cash  equivalents, at beginning of period                                                                     | ** ** | **11,661**                                                                                  | ** **    | **2,691**                                                |       | 1,186 |   |
|                                                                                                                   |       |                                                                                        |          |                                                     |       |   |   |
| **CASH  AND CASH EQUIVALENTS, END OF PERIOD**                                                                          | ** ** | **$**                                                                                       | **1,960,333** | ** **                                               | **$**      | **1,960,333** |   | $ | 2,691 |   |
|                                                                                                                   |       |                                                                                        |          |                                                     |       |   |   |
| **SUPLEMENTAL  CASH FLOW INFORMATION:**                                                                                |       |                                                                                        |          |                                                     |       |   |   |
|                                                                                                                   |       |                                                                                        |          |                                                     |       |   |   |
| Cash paid for:                                                                                                         |       |                                                                                        |          |                                                     |       |   |   |
|                                                                                                                   |       |                                                                                        |          |                                                     |       |   |   |
| Interest                                                                                                               |       | $                                                                                           | —        |                                                     | $          | — |   | $ | — |   |
| Income taxes                                                                                                           |       | $                                                                                           | —        |                                                     | $          | — |   | $ | — |   |
|                                                                                                                   |       |                                                                                        |          |                                                     |       |   |   |
| 416 Private  Placement Units were issued in exchange for $56,500 of convertible notes plus  $5,900 of accrued interest |       | $                                                                                           | 62,400        |                                                     | $          | 62,400 |   | $ | — |   |
| 68 Private  Placement Units were issued in exchange for $8,000 of stock subscriptions  plus $2,200 of accrued interest |       | $                                                                                           | 10,200        |                                                     | $          | 10,200 |   | $ | — |   |

 

See notes tofinancial statements.

 

13

----

 

**CHASEPACKAGING CORPORATION**

**(A Development Stage Company)**

## **NOTES TO FINANCIAL STATEMENTS**

**DECEMBER 31, 2007 AND 2006**

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

 
| Chase  Packaging Corporation (“the Company”), a Texas Corporation, manufactured  woven paper mesh for industrial applications, polypropylene mesh fabric bags  for agricultural use and distributed agricultural packaging manufactured by  other companies. The Company was a wholly-owned subsidiary of TGC  Industries, Inc. “(TGC”) through July 31, 1996.                                                                                                                                                         |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| The  Company had experienced losses for past years, and the Company’s secured  lender decided not to renew the Company’s operating line of credit. As a  result, the Company’s Board of Directors determined that it was in the best  interest of the Company and all of its creditors to liquidate in an orderly  fashion.                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| On  June 25, 1997, the Company announced to employees and creditors that it  would begin an orderly liquidation of all its assets beginning at the close  of business on June 30, 1997. On July 25, 1997, the Company  notified its creditors by mail that it would commence with an orderly  liquidation of all its remaining assets outside of a formal bankruptcy or  receivership proceeding in a manner intended to maximize asset values.  Liquidation of the Company’s assets was completed as of December 31, 1997. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 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  Statement of Financial Accounting Standards No. 7.                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 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:** |
|--------------------------------------|--------------------------------------------------|

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

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

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

 
| *** *** | ***(b)*** | ***Cash  and Cash Equivalents*** |
|--------------|-----------|----------------------------------|

 
| The Company considers  all highly liquid investments 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, 2007, the Company had cash and cash  equivalents held in financial institutions in excess of Federal Deposit  Insurance Corporation limits in the amount of approximately $1,123,000. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

14

----

#### ** **

**CHASEPACKAGING CORPORATION**

**(A Development Stage Company)**

## **NOTES TO FINANCIAL STATEMENTS**

**DECEMBER 31, 2007 AND 2006**

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

 
| *** *** | ***(c)*** | ***Income  Taxes:*** |
|--------------|-----------|----------------------|

 
| The asset and liability  method is used in accounting for income taxes. Under this method, deferred  tax assets and liabilities are recognized for operating loss and tax credit  carry forwards and for the future tax consequences attributable to  differences between the financial statement carrying amounts of existing  assets and liabilities and their respective tax bases. Deferred tax assets  and liabilities are measured assuming enacted tax rates expected to apply to  taxable income in the years in which those temporary differences are expected  to be recovered or settled. The effect on deferred tax assets and liabilities  of a change in tax rates is recognized in the results of operations in the  period that includes the enactment date. A valuation allowance is recorded to  reduce the carrying amounts of deferred tax assets unless it is more likely  than not that such assets will be realized. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| On January 1,  2007, the Company adopted Financial Accounting Standards Board (FASB)  Interpretation No. 48, “Accounting for Uncertainty in Income Taxes—an  interpretation of FASB Statement No. 109” (FIN 48). There was no  impact on the Company’s financial position, results of operations or cash  flows at December 31, 2007 and for the year then ended as a result of  implementing FIN 48. At the adoption date of January 1, 2007 and at  December 31, 2007, the Company 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. As of January 1,  2007 and December 31, 2007, the Company had no accrued interest or penalties.  The Company currently has no federal or state tax examinations in progress.                                 |

 
| *** *** | ***(d)*** | ***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 common shares outstanding.  Diluted loss  per share is computed by dividing the net loss by the sum of the  weighted-average number of common shares outstanding plus the dilutive effect  of shares issuable through the exercise of Common Stock equivalents. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                           |
| We  have excluded 20,727,000 and 1,270,000 Common Stock equivalents from the  calculation of diluted loss per share for the years ended December 31,  2007 and 2006, respectively, which, if included, would have an antidilutive  effect.                                                                                                                                |

 
| *** *** | ***(e)*** | ***Recently  Issued Accounting Pronouncements:*** |
|--------------|-----------|---------------------------------------------------|

 
| In December 2007, the FASB issued SFAS No. 141R, “Business  Combinations” (SFAS No. 141R”) and SFAS No. 160, “Consolidations”  (“SFAS No. 160”). These statements establish principles and requirements  for how an acquirer in a business combination recognizes and measures the  assets acquired, liabilities assumed, and any noncontrolling interest  (previously referred to as minority interest) in the acquiree. SFAS  No. 141R and SFAS No. 160 are effective for financial statements  issued for fiscal years beginning after December 15, 2008. Early  adoption is prohibited. The Company does not expect that the adoption of SFAS  No. 141R will have a material impact on its results of operations or  financial position. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

15

----

 

**CHASEPACKAGING CORPORATION**

**(A Development Stage Company)**

## **NOTES TO FINANCIAL STATEMENTS**

**DECEMBER 31, 2007 AND 2006**

#### ** **

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

#### ** **

| *** *** | ***(e)*** | ***Recently  Issued Accounting Pronouncements (continued):*** |
|--------------|-----------|---------------------------------------------------------------|

 
| In February 2007, the FASB issued SFAS No. 159, “The Fair  Value Option for Financial Assets and Financial Liabilities-Including an  Amendment of FASB Statement No. 115” (“SFAS No. 159”). SFAS  No. 159 allows companies to measure certain financial instruments at  fair value without having to apply complex hedge accounting provisions and to  report unrealized gains and losses on elected items in earnings. This  Statement is effective for financial statements issued for fiscal years  beginning after November 15, 2007. The Company does not expect that the  adoption of SFAS No. 159 will have a material impact on its results of  operations or financial position.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| In September 2006, the FASB issued SFAS No. 157, Fair Value  Measurements, which defines fair value, establishes a framework for measuring  fair value in generally accepted accounting principles, and expands  disclosures about fair value measurements. This statement does not require  any new fair value measurements, but provides guidance on how to measure fair  value by providing a fair value hierarchy used to classify the source of the  information. SFAS No. 157 is effective for fiscal years beginning after  November 15, 2007, and all interim periods within those fiscal years. In  February 2008, the FASB released FASB Staff Position (FSP FAS 157-2 –  Effective Date of FASB Statement No. 157) which delays the effective  date of SFAS No. 157 for all nonfinancial assets and nonfinancial  liabilities, except those that are recognized or disclosed at fair value in  the financial statements on a recurring basis (at least annually), to fiscal  years beginning after November 15, 2008 and interim periods within those  fiscal years. We are currently assessing the potential impact that adoption  of this statement would have on our financial statements, if any. |

 
| *** *** | ***(f)*** | ***Reclassifications:*** |
|--------------|-----------|--------------------------|

 
| Prior year  financial statements have been reclassified to conform with the current  year’s presentation. |
|----------------------------------------------------------------------------------------------------------------|

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

 
| ** **                                                     | ** ** | **2007**       | ** **    | **2006**       | ** ** |
|----------------------------------------------------------------|------------|----------------|---------------|----------------|------------|
| Deferred tax  assets and liabilities consist of the following: | ** ** | ** **     | ** **    | ** **     | ** ** |
| ** **                                                     | ** ** | ** **     | ** **    | ** **     | ** ** |
| Deferred tax  assets:                                          | ** ** | ** **     | ** **    | ** **     | ** ** |
| Net operating  loss carry forwards                             | ** ** | **$**          | **1,135,000** | ** **     | **$**      | **1,122,000** | ** ** |
| ** **                                                     | ** ** | ** **     | ** **    | ** **     | ** ** |
| Less valuation  allowance                                      | ** ** | **(1,135,000** | **)**         | **(1,122,000** | **)**      |
| ** **                                                     | ** ** | **$**          | **—**    | ** **     | **$**      | **—** | ** ** |

 
| At December 31, 2007, the Company had approximately $3,330,000  of net operating loss carry forwards (“NOLs”) available which expires in  years beginning in 2011. The benefits of these NOLs may be substantially  reduced in the future if the Company is successful in establishing a new  business. Since the Company cannot determine that it is more likely than not  that it will be able to utilize the deferred tax asset, a 100% valuation  allowance has been provided. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| In accordance with certain  provisions of the Tax Reform Act of 1986, a change in ownership of greater  than 50% within a three year period will place an annual limitation on the  corporation’s ability to utilize its existing tax benefit carryforwards.                                                                                                                                                                                                                                 |

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

 
| The  Company closed a private placement of 13,334 Units on September 7, 2007.  Each Unit was sold for $150 and consists of: one share of Series A 10%  Convertible Preferred Stock ($100 stated value), |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

16

----

 

**CHASEPACKAGING CORPORATION**

**(A Development Stage Company)**

## **NOTES TO FINANCIAL STATEMENTS**

**DECEMBER 31, 2007 AND 2006**

 
| convertible  into 1,000 shares of Common Stock; 500 shares of Common Stock; and 500 5-year  warrants, each warrant exercisable for one share of Common Stock at $0.15 per  share. 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. 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. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Dividends  on the Series A Preferred Stock are payable semi-annually in cash or in  kind (i.e., Series A Preferred Stock) at the discretion of the Board of  Directors.                                                                                                                                                                                                                                                                                                                                        |

 
| **NOTE   5   -** | **PRIOR STOCK SUBSCRIPTION:** |
|--------------------------------------|-------------------------------|

 
| **In July 2002, the Company received $8,000 as  payment for 800,000 shares of Common Stock which were never issued. Through  September 7, 2007 (the date of the closing of the private placement),  the $8,000 accrued $2,200 in compounded interest, which management recorded due  to the non issuance of shares for a five year period. The Board of Directors  of the Company approved the issuance on September 7, 2007 of 68 Private  Placement Units (see Note 4) in exchange for the $10,200 of cash received and  accrued interest.** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

#### ** **

| **NOTE   6   -** | **CONVERTIBLE DEBT - RELATED PARTY:** |
|--------------------------------------|---------------------------------------|

 
| Prior to June 30,  2007, the Company had issued 5% Convertible Notes aggregating $56,500. The  Note Holders are directors and an officer of the Company. The Notes were  convertible into common stock at $0.01 or par value (currently $0.10 per  share) whichever is greater. The Company and the Note Holders had the option  to mutually extend the term of the Notes if the par value had not been  reduced to $0.01. If the Notes were converted at par greater than $0.01, then  the Note Holders would, upon conversion, receive a Unit consisting of one  share of Common Stock and a 10-year warrant exercisable at the then par value  of the Common Stock. The Company had analyzed the conversion feature of the  debt as an embedded derivative using the guidance provided in SFAS 133 as  amended in SFAS 149 – “Accounting for Derivative Instruments and Hedging  Activities” and Emerging Issues Task Force (“EITF”) 00-19 “Accounting for  Derivative Financial Instruments Indexed to, and Potentially Settled in, a  Company’s Own Stock” and had concluded that the conversion feature is  afforded equity classification since the Company had sufficient authorized  and unissued shares available to settle the contract after considering all  other commitments that may require the issuance of stock during the maximum  period the derivative contract could remain outstanding. Interest would  accrue and be paid at maturity and, if unpaid, added to principal at the time  of conversion. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| The notes aggregating  $62,400 including accrued interest of $5,900, were converted into 416 Private  Placement Units (see Note 4) on September 7, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

 
| **NOTE   7   -** | **SHAREHOLDERS’ EQUITY:** |
|--------------------------------------|--------------------------------|

 
| The Company currently has  no stock option plan; all previously issued stock options have expired,  unexercised. The Company intends to submit, to the shareholders, a new stock  option plan at its annual meeting to be held in 2008. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

17

----

 

**ITEM8.  CHANGES IN AND DISAGREEMENTS WITHACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.**

 

None.

 

**ITEM 8A.  CONTROLS ANDPROCEDURES.**

 

(a) Evaluationof Disclosure Controls and Procedures.

 

Underthe supervision and with the participation of our management, including ourprincipal executive officer and principal financial officer, we conducted anevaluation of the effectiveness of the design and operation of our disclosurecontrols and procedures, as defined in Rules 13a-15(e) and 15d-15(e) underthe Securities Act of 1934, as of the end of the period covered by thisreport.  Based on this evaluation, ourprincipal executive officer and principal financial officer concluded that, asof the period covered by this report, our disclosure controls and procedureswere effective to provide reasonable assurance that the information required tobe included in our Securities and Exchange Commission (“SEC”) reports isrecorded, processed, summarized and reported within the time periods specifiedin SEC rules and forms.

 

(b) Changesin Internal Controls over Financial Reporting.

 

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

 

**Management’s Annual Report on Internal Control over FinancialReporting**

 

Ourmanagement is responsible for establishing and maintaining adequate internalcontrol over financial reporting. Internal control over financial reporting isa process designed by, or under the supervision of, the chief executive officerand chief financial officer and effected by our Board of Directors, managementand other personnel, to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles.

 

Ourevaluation of internal control over financial reporting includes using the COSOframework, an integrated framework for the evaluation of internal controlsissued by the Committee of Sponsoring Organizations of the Treadway Commission,to identify the risks and control objectives related to the evaluation of ourcontrol environment. As a development stage company with no revenues andlimited operations, we have only one employee who performs all of theaccounting functions. While our chief executive officer reviews all of thisemployee’s work product, it still represents a deficiency in that there is nosegregation of duties. Management believes that at the present time, there isno reason to hire additional accounting personnel.

 

Subjectto the above qualification, our management has concluded that our internalcontrol over financial reporting was effective as of December 31, 2007.

 

Thisannual report does not include an attestation report of the company’sregistered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’sregistered public accounting firm pursuant to temporary rules of the SECthat permit the Company to provide only management’s report in this annualreport.

 

**ITEM 8B.  OTHERINFORMATION.**

 

None.

 

18

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**PART III**

 

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

 

The Board of Directors of the Company consistsof four persons who will serve until the next annual meeting of shareholders ofthe Company.  The following table setsforth certain information concerning the individuals serving as Directors ofthe Company:

 
| **Name and Age** | ** ** | **Director Since** | ** ** | **Business Experience and Other Directorships**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|----------------------------|------------|-------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                       |       |                    |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Allen T. McInnes, 70       |       | 1993                    |       | Currently Dean of the Business School of Texas  Tech University; Director of TGC Industries, Inc., a geophysical  services company; Director of TETRA Technologies, Inc., an oil and gas  services company.                                                                                                                                                                                                                                                                                                                                                                                        |
|                       |       |                    |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Herbert M. Gardner, 68     |       | 2001                    |       | Executive Vice President of  Barrett-Gardner Associates, Inc., a private merchant banking firm;  Director of Co-Active Marketing Group, Inc., a marketing and sales  promotion company; Director of Nu Horizons Electronics Corp., an electronic  component distributor; Chairman of the Board of Supreme  Industries, Inc., a manufacturer of specialized truck bodies and shuttle  buses; Director of TGC Industries, Inc., a geophysical services company;  Director of Rumson-Fair Haven Bank and Trust Company, a New Jersey state  independent, commercial bank and trust company. |
|                       |       |                    |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| William J. Barrett, 68     |       | 2001                    |       | President of Barrett-Gardner  Associates, Inc., a private merchant banking firm; Director of  MassMutual Corporate Investors and MassMutual Participation Investors,  closed-end investment trusts; Director of Supreme Industries, Inc., a  manufacturer of specialized truck bodies and shuttle buses; Director of TGC  Industries, Inc., a geophysical services company; Chairman of the Board  of Rumson-Fair Haven Bank and Trust Company, a New Jersey state independent,  commercial bank and trust company.                                                                           |
|                       |       |                    |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Edward L. Flynn, 73        |       | 2007                    |       | Owner of Flynn Meyer Company, a  restaurant management company; Treasurer and Director of Citri-Lite co., a  soft drink company; Director of TGC Industries, Inc., a geophysical  services company; Director of Supreme Industries, Inc., a manufacturer  of specialized truck bodies and shuttle buses.                                                                                                                                                                                                                                                                                           |

 

Directorsof the Company are not paid fees, but will be reimbursed for expenses inconnection with attendance at meetings of the Board of Directors andout-of-pocket expenses incurred in connection with Company business anddevelopment.

 

19

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

 
| Allen T. McInnes   |   | 70     |   | Chairman,  President and Treasurer |
|--------------------|--------|--------|--------|------------------------------------|
|               |   |   |   |                               |
| Herbert M. Gardner |   | 68     |   | Vice  President                    |
|               |   |   |   |                               |
| William J. Barrett |   | 68     |   | Secretary                          |
|               |   |   |   |                               |
| Ann C. W. Green    |   | 66     |   | Chief  Financial Officer           |

 

Tothe best of the Company’s knowledge all Directors, executive officers, andbeneficial owners have complied with the requirements of Section 16(a) ofthe Exchange Act.

 

**ITEM 10.  EXECUTIVECOMPENSATION.**

 

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

 

SUMMARY COMPENSATION TABLE

 
| **Name and  Principal  Position**   | ** ** | **Year** | ** ** | **Salary** | ** ** | **Bonus** | ** ** | **Stock  Awards** | ** ** | **Option  Awards** | ** ** | **Non-Equity  Incentive Plan  Compensation ($)** | ** ** | **Nonqualified  Deferred  Compensation  Earnings ($)** | ** ** | **All Other  Compensation** | ** ** | **Total (4)** | ** ** |
|------------------------------------------|------------|----------|------------|------------|------------|-----------|------------|-------------------|------------|--------------------|------------|------------------------------------------------------------|------------|-------------------------------------------------------------|------------|----------------------------------|------------|--------------------|------------|
|                                     |       |     |       |       |       |      |       |              |       |               |       |                                                       |       |                                                        |       |                             |       |               |       |   |   |
| Ann C. W. Green, Chief Financial Officer |       | 2007     |       | $          | 2,833      |      | -0-        |              | -0-        |               | -0-        |                                                       | -0-        |                                                        | -0-        |                             | -0-        |               | $          | 2,833 |   |
|                                     |       | 2006     |       | -0-        |       | -0-       |       | -0-               |       | -0-                |       | -0-                                                        |       | -0-                                                         |       | -0-                              |       | -0-                |       |

 

**ITEM 11.  SECURITYOWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDERMATTERS.**

 

Thefollowing table sets forth the names of those persons known to management to bebeneficial owners of more than five percent of the Company’s $.10 par valueCommon Stock as of December 31, 2007. The table also sets forth information with respect to the Company’sCommon Stock which is beneficially owned by each director and executive officerof the Company, and by all directors and executive officers of the Company as agroup, as of December 31, 2007 (including shares beneficially owned by suchpersons, pursuant to the rules of beneficial ownership, as a result of theownership of certain warrants, etc.) according to data furnished by the personsnamed.  Persons having direct beneficialownership of the Company’s Common Stock possess the sole voting and dispositivepower in regard to such stock.

 

20

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| **Name and address**                                             | ** ** | **Title of Class** | ** ** | **Amount and Nature of  Beneficial Ownership** | ** **   | **Approximate Percentage  of Class (1)** | ** ** |
|----------------------------------------------------------------------------|------------|------------------------------|------------|--------------------------------------------------------------------|--------------|----------------------------------------------------|------------|
| ** **                                                                 | ** ** | ** **                   | ** ** | ** **                                                         | ** **   | ** **                                         | ** ** |
| Allen T. McInnes  4532 7th Street  Lubbock, TX 79416                       |       | Common                       |       | 4,384,954                                                          | (6)          | 24.6                                               | %          |
|                                                                       |       |                         |       |                                                               |         |                                               |       |
| Herbert M. Gardner   636 River Road  Fair Haven, NJ 07704                  |       | Common                       |       | 3,841,809                                                          | (2)(6)       | 21.7                                               | %          |
|                                                                       |       |                         |       |                                                               |         |                                               |       |
| William J. Barrett  19 Point Milou  St. Barthelemy, FWI                    |       | Common                       |       | 5,470,405                                                          | (3)(6)       | 29.3                                               | %          |
|                                                                       |       |                         |       |                                                               |         |                                               |       |
| Edward L. Flynn  75-11 Myrtle Avenue  Glendale, NY 11385                   |       | Common                       |       | 1,402,359                                                          | (4)(6)       | 8.5                                                | %          |
|                                                                       |       |                         |       |                                                               |         |                                               |       |
| Ann C. W. Green  636 River Road  Fair Haven, NJ 07704                      |       | Common                       |       | 662,775                                                            | (6)          | 4.2                                                | %          |
|                                                                       |       |                         |       |                                                               |         |                                               |       |
| Special Situations Funds  153 E. 53rd Street, 51st Fl.  New York, NY 10022 |       | Common                       |       | 789,165                                                            | (5)          | 5.08                                               | %          |
|                                                                       |       |                         |       |                                                               |         |                                               |       |
| All directors & officers as a group   (5 persons)                 |       | Common                       |       | 15,762,302                                                         | (2)(3)(4)(6) | 64.1                                               | %          |

 

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(1) Thepercentage calculations have been made in accordance with Rule 13d-3(d)(1) promulgatedunder the Securities Exchange Act of 1934.

 

(2) Includes167,590 shares of Common Stock owned by Herbert M. Gardner’s wife.  Mr. Gardner has disclaimed beneficialownership of these shares.

 

(3) Includes286,345 shares of Common Stock owned by William J. Barrett’s wife.  Mr. Barrett has disclaimed beneficialownership of these shares.

 

(4) Includes167,000 shares of Common Stock owned by Edward L. Flynn’s wife.  Mr. Flynn has disclaimed beneficialownership of these shares.

 

(5) These shares are held in three separateSpecial Situations Funds.

 

(6) Includesthe Common Stock underlying warrants and Series A Convertible PreferredStock held by the following beneficial owners:.

 

21

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| **Beneficial Owner**             | ** ** | ** ** | ** ** | **Number of Common  Shares Underlying Series  A Preferred  Beneficially Owned** | ** ** | **Number of Common Shares  Underlying warrants  Beneficially Owned** | ** ** |
|---------------------------------------|------------|------------|------------|---------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------|------------|
| **Directors  and Executive Officers** | ** ** | ** ** | ** ** | ** **                                                                                                    | ** ** | ** **                                                                                    | ** ** |
| Allen T. McInnes                      |       |       |       | 1,533,000                                                                                                     |       | 766,500                                                                                       |       |
| Herbert M.  Gardner                   |       |       | (i)        |                                                                                                          | 1,425,000  |                                                                                          | 712,500    |   |
| William J.  Barrett                   |       |       | (ii)       |                                                                                                          | 2,158,000  |                                                                                          | 1,079,000  |   |
| Edward L. Flynn                       |       |       | (iii)      |                                                                                                          | 668,000    |                                                                                          | 334,000    |   |
| Ann C. W. Green                       |       |       |       | 237,000                                                                                                       |       | 118,500                                                                                       |       |

 

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(i)  The numbersshown include 178,000 and 89,000 shares of Common Stock underlying Series APreferred Stock and warrants, respectively, held by the named person’s spouse,to which the named person disclaims beneficial ownership.

(ii)  The numbersshown include 334,000 and 167,000 shares of Common Stock underlying Series APreferred Stock and warrants, respectively, held by the named person’s spouse,to which the named person disclaims beneficial ownership.

(iii)  The numbersshown include 334,000 shares and 167,000 shares of Common Stock underlying Series APreferred Stock and warrants, respectively, held by the named person’s spouse,to which the named person disclaims beneficial ownership.

 

**ITEM 12.  CERTAIN RELATIONSHIPSAND RELATED TRANSACTIONS.**

** **

Priorto June 30, 2007, the Company issued 5% Convertible Notes aggregating$56,500. The Note Holders are Directors and an officer of the Company.  The Notes aggregating $62,400 includingaccrued interest of $5,900, were converted into 416 private placement Units on September 7,2007.

 

**ITEM13.  EXHIBITS**

 

**Exhibits**

** **

| **Exhibit  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                 |       | Bylaws  of the Company filed as Exhibit 3.2 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.                                 |
|                |       |                                                                                                                                                                                                                                                      |
| 31.1*               |       | Certification  of the Chief Executive Officer pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002.                                                                                                                                            |
|                |       |                                                                                                                                                                                                                                                      |
| 31.2*               |       | Certification  of the Principal Financial and Accounting 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 Principal Financial Officer pursuant to 18 U.S.C. Section 1350,  as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                    |

 

----

*Filed herewith.

 

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**ITEM14.  PRINCIPAL ACCOUNTANT FEES ANDSERVICES**

 

**AuditFees**

 

                Theaggregated fees billed for each of the last two fiscal years for professionalservices rendered by the principal accountant for the audit of the Company’sannual financial statements and review of financial statements included in ourForms 10-QSB were $14,500 and $12,500 for 2007 and 2006, respectively.

 

**Audit-RelatedFees**

 

                None.

 

**Tax Fees**

 

Theaggregated fees billed for each of the last two fiscal years for professionalservices rendered by the principal accountant for the preparation of ourcorporate tax returns were $2,000 and $1,500 for 2007 and 2006, respectively.

 

**Allother Fees**

 

                Theaggregated fees billed for each of the last two fiscal years for professionalservices rendered by the principal accountant for the preparation of ourprivate placement unit filing were $2,093 and $0 for 2007 and 2006,respectively.

 

TheBoard of Directors, which functions as the audit committee, makes reasonableinquiry as to the independence of our principal auditors based upon theconsiderations set forth in Rule 2-01 of Regulation S-X, including theexamination of representation letters furnished by the principal accountant.

 

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##### ** **

##### **SIGNATURES**

##### ** **

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

 
| ** **                | **CHASE  PACKAGING CORPORATION** |
|---------------------------|----------------------------------|
| ** **                | ** **                       | ** ** |
| ** **                | ** **                       | ** ** |
| Date: March 31, 2008 | By:                              | /s/ Allen T. McInnes |
|                      |                             | Allen  T. McInnes |
|                      |                             | Chairman  of the Board, President and Treasurer |
|                           |                                  |  |  |

 

Inaccordance with the Exchange Act, this report has been signed below by thefollowing persons on behalf of the registrant and in the capacities and on thedates indicated.

 

 
| Date:  March 31, 2008 | By:      | /s/  Allen T. McInnes                            |
|----------------------------|----------|--------------------------------------------------|
|                       |     | Allen  T. McInnes                                |
|                       |     | Chairman  of the Board, President and Treasurer  |
|                       |     |                                             |
|                       |     |                                             |
| Date:  March 31, 2008 | By:      | /s/  Ann C.W. Green                              |
|                       |     | Ann  C. W. Green                                 |
|                       |     | Chief  Financial Officer and Assistant Secretary |
|                       |     |                                             |
|                       |     |                                             |
| Date:  March 31, 2008 | By:      | /s/  Herbert M. Gardner                          |
|                       |     | Herbert  M. Gardner                              |
|                       |     | Vice  President and Director                     |
|                       |     |                                             |
|                       |     |                                             |
| Date:  March 31, 2008 | By:      | /s/  William J. Barrett                          |
|                       |     | William  J. Barrett                              |
|                       |     | Secretary  and Director                          |
|                       |     |                                             |
|                       |     |                                             |
| Date:  March 31, 2008 | By:      | /s/  Edward L. Flynn                             |
|                       |     | Edward  L. Flynn                                 |
|                       | Director |

 

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