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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549



FORM 10-K/A

(Amendment No. 1)



(Mark One)



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



For the fiscal year ended December 31, 2015



OR



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



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   
|incorporation or organization)  |  | Identification No.)



106 West River Road, Rumson NJ 07760

(Address of principal executive offices and zip code)



(732) 741.1500

(Registrant's telephone number, including area code)



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



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



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



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



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes xNo  ̈



Indicate by check whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes xNo  ̈



Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405) is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ̈



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





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



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



The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business day of the Registrant's most recently completed second fiscal quarter was $385,393.



Number of shares of common stock outstanding as of March 28, 2016: 15,536,275



Documents incorporated by reference



Listed below are documents, parts of which are incorporated herein by reference, and the part of this report into which the document is incorporated: None





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CHASE PACKAGING CORPORATION

FORM 10-K

For the Fiscal Year Ended December 31, 2015



TABLE OF CONTENTS





|           |                                            |   | PAGE NO | 
|---------- | ------------------------------------------ | - | ------- | 
|           |                                            |   |        
|PART IV    |                                            |   |        
|           |                                            |   |         | 
|ITEM 15    | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |   | 4       | 
|SIGNATURES |                                            | 5 |        





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EXPLANATORY NOTE



Chase Packaging Corporation (the "Company") is filing this Amendment No. 1 (the "Amendment No. 1") to its Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed on March 28, 2016 (the "Original 10-K"). Company is filing this Amendment No. 1 to provide an amended report of its independent registered accounting firm. Specifically, the Company’s accounting firm deleted “auditing” from the sentence “We conducted our audits in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States)” that was included in the Original 10-K.



In accordance with applicable SEC rules and as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, this amendment includes new certifications from our Principal Executive Officer and Principal Financial Officer dated as of the date of filing of this amendment.



No changes have been made to the Original 10-K and subsequent amendment other than to the report of the Company’s independent registered accounting firm. This amendment speaks as of the date of the Original 10-K, does not reflect events that may have occurred after the date of the Original 10-K and does not modify or update in any way the disclosures made in the Original 10-K, except as required to reflect the revision discussed above. This amendment should be read in conjunction with the Original 10-Kand with our filings with the SEC filed subsequent to the filing of the Original 10-K.





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PART IV



ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.





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





| | (1) | Financial Statements included in Item 8 above are filed as part of this annual report.                                                                                                                                            
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                   
| | (2) | Financial Statement Schedules included in Item 8 herein:                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                   
| |     | All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore, have been omitted.





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





|Number   |  | Description                                                                                                                                           
|-------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
|         |  |                                                                                                                                                       
|31.1*    |  | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                               
|         |  |                                                                                                                                                       
|31.2*    |  | Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                               
|         |  |                                                                                                                                                       
|32.1*    |  | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|         |  |                                                                                                                                                       
|32.2*    |  | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|         |  |                                                                                                                                                       
|101.INS* |  | XBRL Instance Document                                                                                                                                
|         |  |                                                                                                                                                       
|101.SCH* |  | XBRL Taxonomy Extension Schema Document                                                                                                               
|         |  |                                                                                                                                                       
|101.CAL* |  | XBRL Taxonomy Extension Calculation Linkbase Document                                                                                                 
|         |  |                                                                                                                                                       
|101.DEF* |  | XBRL Taxonomy Extension Definition Linkbase Document                                                                                                  
|         |  |                                                                                                                                                       
|101.LAB* |  | XBRL Taxonomy Extension Labels Linkbase Document                                                                                                      
|         |  |                                                                                                                                                       
|101.PRE* |  | XBRL Taxonomy Extension Presentation Linkbase Document                                                                                                

___________

*filed herewith





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SIGNATURES



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





|                       | CHASE PACKAGING CORPORATION |                                               
|---------------------- | --------------------------- | ----------------------------------------------
|                       |                             |                                               
|Date: January 11, 2017 | By:                         | /s/ Allen T. McInnes                          
|                       |                             | Allen T. McInnes                              
|                       |                             | Chairman of the Board, President and Treasurer
|                       |                             | (Principal Executive Officer)                 



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





|Date: January 11, 2017 | By: | /s/ Allen T. McInnes                            | 
|---------------------- | --- | ----------------------------------------------- | 
|                       |     | Allen T. McInnes                                | 
|                       |     | Chairman of the Board, President and Treasurer  | 
|                       |     | (Principal Executive Officer)                   | 
|                       |     |                                                 | 
|Date: January 11, 2017 | By: | /s/ Ann C.W. Green                              | 
|                       |     | Ann C. W. Green                                 | 
|                       |     | Chief Financial Officer and Assistant Secretary | 
|                       |     | (Principal Financial and Accounting Officer)    | 
|                       |     |                                                 | 
|Date: January 11, 2017 | By: | /s/ Herbert M. Gardner                          | 
|                       |     | Herbert M. Gardner                              | 
|                       |     | Vice President and Director                     | 
|                       |     |                                                 | 
|Date: January 11, 2017 | By: | /s/ William J. Barrett                          | 
|                       |     | William J. Barrett                              | 
|                       |     | Secretary and Director                          | 
|                       |     |                                                 | 
|Date: January 11, 2017 | By: | /s/ Edward L. Flynn                             | 
|                       |     | Edward L. Flynn                                 | 
|                       |     | Director                                        | 
|                       |     |                                                 | 
|Date: January 11, 2017 | By: | /s/ Wayne Whitener                              | 
|                       |     | Wayne Whitener                                  | 
|                       |     | Director                                        | 





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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors and Shareholders of

Chase Packaging Corporation

Rumson, NJ



We have audited the accompanying balance sheets of Chase Packaging Corporation, (the "Company") as of December 31, 2015 and 2014, and the related statements of operations, stockholders' equity and cash flows for each of the years in the two year period ended December 31, 2015. Chase Packaging Corporation's management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.



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



In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Chase Packaging Corporation as of December 31, 2015 and 2014, and the results of its operations and its cash flows for each of the years in the two year period ended December 31, 2015, in conformity with accounting principles generally accepted in the United States of America.



/s/ ZBS Group, LLP



Plainview, NY

March 10, 2016



255 Executive Drive, Suite 400 Plainview, New York 11803

Tel: (516) 394-3344 Fax: (516) 908-7867

www.zbscpas.com



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CHASE PACKAGING CORPORATION

BALANCE SHEETS





|                                                                                                                                                                                                                                                                                                  |  | December 31, |            |   | December 31, |           
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ---------- | - | ------------ | ----------
|                                                                                                                                                                                                                                                                                                  |  | 2015         |            |   | 2014         |           
|                                                                                                                                                                                                                                                                                                  |  |              |            |   |              |           
|ASSETS                                                                                                                                                                                                                                                                                           
|CURRENT ASSETS:                                                                                                                                                                                                                                                                                   |  |              |            |   |              |           
|Cash                                                                                                                                                                                                                                                                                              |  | $            | 973,470    |   |              | $         
|                                                                                                                                                                                                                                                                                                  |  |              |            |   |              |           
|TOTAL ASSETS                                                                                                                                                                                                                                                                                      |  | $            | 973,470    |   |              | $         
|                                                                                                                                                                                                                                                                                                  |  |              |            |   |              |           
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                                                                                                                             
|CURRENT LIABILITIES:                                                                                                                                                                                                                                                                              |  |              |            |   |              |           
|Accounts payable and accrued expenses                                                                                                                                                                                                                                                             |  | $            | 8,917      |   |              | $         
|                                                                                                                                                                                                                                                                                                  |  |              |            |   |              |           
|TOTAL CURRENT LIABILITIES                                                                                                                                                                                                                                                                         |  |              | 8,917      |   |              |           
|                                                                                                                                                                                                                                                                                                  |  |              |            |   |              |           
|COMMITMENTS AND CONTINGENCIES                                                                                                                                                                                                                                                                     |  |              | -          |   |              |           
|                                                                                                                                                                                                                                                                                                  |  |              |            |   |              |           
|STOCKHOLDERS' EQUITY:                                                                                                                                                                                                                                                                             |  |              |            |   |              |           
|PREFERRED STOCK,$1.00 par value; 4,000,000 authorized: Series A 10% Convertible Preferred stock; 50,000 shares authorized; 30,215 and 27,466 shares issued and outstanding as of December 31, 2015 and 2014, liquidation preference of $3,021,500 and $2,746,600 as of December 31, 2015 and 2014 |  |              | 2,061,429  |   |              |           
|Common stock, $.10 par value 200,000,000 shares authorized; 16,033,862 shares issued and 15,536,275 shares outstanding as of December 31, 2015 and 2014                                                                                                                                           |  |              | 1,603,387  |   |              |           
|Treasury Stock, $.10 par value 497,587 shares as of December 31, 2015 and 2014                                                                                                                                                                                                                    |  |              | (49,759    | ) |              | (49,759 ) 
|Additional paid-in capital                                                                                                                                                                                                                                                                        |  |              | 2,598,058  |   |              |           
|Accumulated deficit                                                                                                                                                                                                                                                                               |  |              | (5,248,562 | ) |              | (5,147,710
|TOTAL STOCKHOLDERS' EQUITY                                                                                                                                                                                                                                                                        |  |              | 964,553    |   |              |           
|                                                                                                                                                                                                                                                                                                  |  |              |            |   |              |           
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                                                                                                                        |  | $            | 973,470    |   |              | $         



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





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CHASE PACKAGING CORPORATIONSTATEMENTS OF OPERATIONS





|                                                               |  | For The Year EndedDecember 31, |           
|-------------------------------------------------------------- |  | ------------------------------ | ----------
|                                                               |  | 2015                           |           
|                                                               |  |                                |           
|NET SALES                                                      |  | $                              | -         
|                                                               |  |                                |           
|OPERRATING EXPENSES:                                           |  |                                |           
|General and administrative expense                             |  |                                | 86,270    
|                                                               |  |                                |           
|LOSS FROM OPERATIONS                                           |  |                                | (86,270   
|                                                               |  |                                |           
|OTHER INCOME (EXPENSE)                                         |  |                                |           
|Warrants modification expense                                  |  |                                | (14,684   
|Interest and other income                                      |  |                                | 102       
|                                                               |  |                                |           
|TOTAL OTHER INCOME (EXPENSE)                                   |  |                                | (14,582   
|                                                               |  |                                |           
|LOSS BEFORE INCOME TAXES                                       |  |                                | (100,852  
|                                                               |  |                                |           
|Provision for income taxes                                     |  |                                | -         
|                                                               |  |                                |           
|NET LOSS                                                       |  | $                              | (100,852  
|                                                               |  |                                |           
|LOSS PER COMMON SHARE – BASIC AND DILUTED                      |  | $                              | (0.01     
|                                                               |  |                                |           
|WEIGHTED AVERAGE COMMON SHARES OUTSTANDING – BASIC AND DILUTED |  |                                | 15,536,275



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





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CHASE PACKAGING CORPORATION

STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014





|                                                                                         |  | Preferred |        |  | Common |   |           | Additional Paid-in |  |  | Accumulated |  |  | Treasury Stock |           |  |         |  
|---------------------------------------------------------------------------------------- |  | --------- | ------ |  | ------ | - | --------- | ------------------ |  |  | ----------- |  |  | -------------- | --------- |  | ------- | -
|                                                                                         |  | Shares    |        |  | Amount |   |           | Shares             |  |  | Amount      |  |  | Capital        |           |  | Deficit |  
|Balance at January 1, 2014                                                               |  |           | 24,971 |  |        | $ | 2,056,185 |                    |  |  | 16,033,862  |  |  | $              | 1,603,387 |  |         | $
|                                                                                         |  |           |        |  |        |   |           |                    |  |  |             |  |  |                |           |  |         |  
|Preferred shares issued as dividend                                                      |  |           | 2,495  |  |        |   | 2,495     |                    |  |  | -           |  |  |                | -         |  |         |  
|Stock based compensation                                                                 |  |           | -      |  |        |   | -         |                    |  |  | -           |  |  |                | -         |  |         |  
|Modification of warrants, expiration of 6,909,000 warrants extended to September 6, 2015 |  |           |        |  |        |   |           |                    |  |  |             |  |  |                |           |  |         |  
|Net loss for the year ended December 31, 2014                                            |  |           | -      |  |        |   | -         |                    |  |  | -           |  |  |                | -         |  |         |  
|                                                                                         |  |           |        |  |        |   |           |                    |  |  |             |  |  |                |           |  |         |  
|Balance at December 31, 2014 - Adjusted                                                  |  |           | 27,466 |  |        | $ | 2,058,680 |                    |  |  | 16,033,862  |  |  | $              | 1,603,387 |  |         | $
|                                                                                         |  |           |        |  |        |   |           |                    |  |  |             |  |  |                |           |  |         |  
|Preferred shares issued as dividend                                                      |  |           | 2,749  |  |        |   | 2,749     |                    |  |  | -           |  |  |                | -         |  |         |  
|Modification of warrants, expiration of 6,909,000 warrants extended to September 6, 2017 |  |           |        |  |        |   |           |                    |  |  |             |  |  |                |           |  |         |  
|Net loss for the year ended December 31, 2015                                            |  |           | -      |  |        |   | -         |                    |  |  | -           |  |  |                | -         |  |         |  
|                                                                                         |  |           |        |  |        |   |           |                    |  |  |             |  |  |                |           |  |         |  
|Balance at December 31, 2015                                                             |  |           | 30,215 |  |        | $ | 2,061,429 |                    |  |  | 16,033,862  |  |  | $              | 1,603,387 |  |         | $



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





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CHASE PACKAGING CORPORATION

STATEMENTS OF CASH FLOWS





|                                                                               |  | For The Year EndedDecember 31, |          
|------------------------------------------------------------------------------ |  | ------------------------------ | ---------
|                                                                               |  | 2015                           |          
|                                                                               |  |                                |          
|CASH FLOWS FROM OPERATING ACTIVITIES:                                          |  |                                |          
|Net loss                                                                       |  | $                              | (100,852 
|                                                                               |  |                                |          
|Adjustment to reconcile to net loss to net cash used in operating activities : |  |                                |          
|Warrants modification expense                                                  |  |                                | 14,684   
|Stock based compensation                                                       |  |                                | -        
|Change in assets and liabilities:                                              |  |                                |          
|Accounts payable and accrued expenses                                          |  |                                | (2,088   
|                                                                               |  |                                |          
|Net cash used in operating activities                                          |  |                                | (88,256  
|                                                                               |  |                                |          
|CASH FLOWS FROM INVESTING ACTIVITIES                                           |  |                                | -        
|                                                                               |  |                                |          
|CASH FLOWS FROM FINANCING ACTIVITIES                                           |  |                                | -        
|                                                                               |  |                                |          
|NET DECREASE IN CASH                                                           |  |                                | (88,256  
|                                                                               |  |                                |          
|Cash, at beginning of year                                                     |  |                                | 1,061,726
|                                                                               |  |                                |          
|CASH, END OF YEAR                                                              |  | $                              | 973,470  
|                                                                               |  |                                |          
|SUPPLEMENTAL CASH FLOW INFORMATION:                                            |  |                                |          
|Cash paid for:                                                                 |  |                                |          
|Interest                                                                       |  | $                              | -        
|Income taxes                                                                   |  | $                              | -        
|                                                                               |  |                                |          
|SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:                      |  |                                |          
|Preferred stock issued as stock dividend                                       |  | $                              | 2,749    



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



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CHASE PACKAGING CORPORATION

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014



NOTE 1 - BASIS OF PRESENTATION:



Chase Packaging Corporation ("the Company"), a Texas Corporation, previously manufactured woven paper mesh for industrial applications, polypropylene mesh fabric bags for agricultural use, and distributed agricultural packaging manufactured by other companies. 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 - IMMATERIAL CORRECTION OF AN ERROR IN PRIOR PERIODS



During the year ended December 31, 2015, the Company identified errors related to an understatement of warrants modification expenses for the modification of the 6,909,000 common share purchase warrants to extend their maturity date to September 7, 2017 from the quarterly period ended September 30, 2014 through September 30, 2015. In accordance with Financial Accounting Standards Board Accounting Standards Codification 250, Accounting Changes and Error Corrections, we evaluated the materiality of the errors from quantitative and qualitative perspectives, and concluded that the errors were immaterial to the Company's prior period interim and annual consolidated financial statements. Since these revisions were not material to any prior period interim or annual financial statements, no amendments to previously filed interim or annual periodic reports are required. Consequently, the Company has adjusted for these errors by revising its historical financial statements presented herein. Regarding the 2014 extension of warrants terms, the Company recognized the cumulative effect of the error on periods prior to those that are presented herein by increasing warrants modification expense by$23,963, increasing additional paid-in capital and reducing accumulated deficit by $23,963 for the quarter ended September 30, 2014, for the fiscal year ended December 31, 2014, and as of the beginning of fiscal year 2015. Regarding the 2015 extension of warrants terms, the Company recognized the warrants modification expense of $14,684 by increasing additional paid-in capital and reducing accumulated deficit by $14,684 for the quarter ended September 30, 2015.



The following table presents the effects of the immaterial error correction on the balance sheet for the periods and year indicated:



Impact of the Restatement





|                                |  | As of September 30, 2014 |           
|------------------------------- |  | ------------------------ | ----------
|                                |  | As PreviouslyReported    |           
|Balance Sheet Data (unaudited): |  |                          |           
|Additional paid-in capital      |  | $                        | 2,564,655 
|Accumulated deficit             |  | $                        | (1,470,804
|Total stockholders' equity      |  | $                        | 1,077,543 





|                           |  | As of December 31, 2014 |           
|-------------------------- |  | ----------------------- | ----------
|                           |  | As PreviouslyReported   |           
|Balance Sheet Data:        |  |                         |           
|Additional paid-in capital |  | $                       | 2,562,160 
|Accumulated deficit        |  | $                       | (5,123,747
|Total stockholders' equity |  | $                       | 1,050,721 





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|                                |  | As of March 31, 2015  |           
|------------------------------- |  | --------------------- | ----------
|                                |  | As PreviouslyReported |           
|Balance Sheet Data (unaudited): |  |                       |           
|Additional paid-in capital      |  | $                     | 2,562,160 
|Accumulated deficit             |  | $                     | (5,147,563
|Total stockholders' equity      |  | $                     | 1,026,905 





|                                |  | As of June 30, 2015   |           
|------------------------------- |  | --------------------- | ----------
|                                |  | As PreviouslyReported |           
|Balance Sheet Data (unaudited): |  |                       |           
|Additional paid-in capital      |  | $                     | 2,562,160 
|Accumulated deficit             |  | $                     | (5,166,084
|Total stockholders' equity      |  | $                     | 1,008,384 





|                                |  | As of September 30, 2015 |           
|------------------------------- |  | ------------------------ | ----------
|                                |  | As PreviouslyReported    |           
|Balance Sheet Data (unaudited): |  |                          |           
|Additional paid-in capital      |  | $                        | 2,562,160 
|Accumulated deficit             |  | $                        | (5,182,903
|Total stockholders' equity      |  | $                        | 991,565   



The following tables present the effects of the immaterial error correction on the statements of income for the periods and year indicated:





|                                          |  | Three Months Ended September 30, 2014 |        
|----------------------------------------- |  | ------------------------------------- | -------
|                                          |  | As PreviouslyReported                 |        
|Statement of Operations Data (unaudited): |  |                                       |        
|Warrants modification expense             |  | $                                     | -      
|Net loss                                  |  | $                                     | (46,057
|Net loss per share, basic and diluted     |  | $                                     | (0.00  





|                                          |  | Nine Months Ended September 30, 2014 |         
|----------------------------------------- |  | ------------------------------------ | --------
|                                          |  | As PreviouslyReported                |         
|Statement of Operations Data (unaudited): |  |                                      |         
|Warrants modification expense             |  | $                                    | -       
|Net loss                                  |  | $                                    | (131,245
|Net loss per share, basic and diluted     |  | $                                    | (0.01   





|                                      |  | Year Ended December 31, 2014 |         
|------------------------------------- |  | ---------------------------- | --------
|                                      |  | As PreviouslyReported        |         
|Statement of Operations Data:         |  |                              |         
|Warrants modification expense         |  | $                            | -       
|Net loss                              |  | $                            | (158,067
|Net loss per share, basic and diluted |  | $                            | (0.01   





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|                                          |  | Three Months Ended September 30, 2015 |        
|----------------------------------------- |  | ------------------------------------- | -------
|                                          |  | As PreviouslyReported                 |        
|Statement of Operations Data (unaudited): |  |                                       |        
|Warrants modification expense             |  | $                                     | -      
|Net loss                                  |  | $                                     | (16,819
|Net loss per share, basic and diluted     |  | $                                     | (0.00  





|                                          |  | Nine Months Ended September 30, 2015 |        
|----------------------------------------- |  | ------------------------------------ | -------
|                                          |  | As PreviouslyReported                |        
|Statement of Operations Data (unaudited): |  |                                      |        
|Warrants modification expense             |  | $                                    | -      
|Net loss                                  |  | $                                    | (59,156
|Net loss per share, basic and diluted     |  | $                                    | (0.00  



NOTE 3 - NEW ACCOUNTING PRONOUNCEMENTS:



In June 2014, the FASB issued ASU 2014-12, "Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite Service Period." This ASU provides more explicit guidance for treating share-based payment awards that require a specific performance target that affects vesting and that could be achieved after the requisite service period as a performance condition. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2015. The Company does not expect the adoption of this guidance to have a material impact on the financial statements.



In August 2014, the FASB issued ASU 2014-15, "Presentation of Financial Statements – Going Concern (Topic 205-40)", which requires management to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern for each annual and interim reporting period. If substantial doubt exists, additional disclosure is required. This new standard will be effective for the Company for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. The Company does not expect the adoption of this guidance to have a material impact on the financial statements.



NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:



Use of Estimates:



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



Cash and Cash Equivalents



The Company considers all highly liquid investments that are readily convertible into cash with a remaining maturity of three months or less at the time of acquisition to be cash equivalents. The Company maintains its cash and cash equivalents balances with high credit quality financial institutions. As of December 31, 2015, and 2014, the Company had cash and cash equivalents held in financial institutions that were uninsured by Federal Deposit Insurance Corporation in the amount of approximately $973,000 and $1,062,000 respectively.





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Income Taxes



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



The Company adopted FASB Interpretation of "Accounting for Uncertainty in Income Taxes". There was no impact on the Company's financial position, results of operations, or cash flows as a result of implementing this guidance. At December 31, 2015 and 2014, the Company evaluated its tax positions and did not have any unrecognized tax benefits. The Company's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company currently has no federal or state tax examinations in progress.



NOTE 5 - BASIC AND DILUTED NET LOSS PER COMMON SHARE:



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



We have excluded 37,424,000 and 34,675,000 common stock equivalents (preferred stock, warrants and stock options) from the calculation of diluted loss per share for the years ended December 31, 2015 and 2014 respectively, which, if included, would have an antidilutive effect.



NOTE 6 - INCOME TAXES:



No current provision for Federal income taxes was required for the years ended December 31, 2015 and 2014, due to the Company's operating losses. At December 31, 2015 and 2014 the Company had unused net operating loss carry-forwards of approximately $1,043,000 and $942,000 which expire at various dates through 2032. Most of this amount is subject to annual limitations under certain provisions of the Internal Revenue Code related to "changes in ownership."



As of December 31, 2015 and 2014, the deferred tax assets related to the aforementioned carry-forwards have been fully offset by valuation allowances, since it is more likely than not that significant utilization of such amounts will not occur in the foreseeable future.





|                                                         |  | 2015 |          |   | 2014 |  
|-------------------------------------------------------- |  | ---- | -------- | - | ---- | -
|Deferred tax assets and valuation allowances consist of: |  |      |          |   |      |  
|Deferred tax assets:                                     |  |      |          |   |      |  
|Net operating loss carry forwards                        |  | $    | 417,000  |   |      | $
|Less valuation allowance                                 |  |      | (417,000 | ) |      |  
|Net deferred tax assets                                  |  | $    | -        |   |      | $



We file income tax returns in the U.S. Federal and Texas state jurisdictions. Tax years for fiscal 2008 through 2015 are open and potentially subject to examination by the New Jersey and Texas state taxing authority.





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The following is a reconciliation of the tax derived by applying the statutory rate to the earnings before income taxes, and comparing that to the recorded income tax (expense) benefits:





|                                                                 |  | Year ended   |    
|---------------------------------------------------------------- |  | ------------ | ---
|                                                                 |  | December 31, |    
|                                                                 |  | 2015         |    
|Tax benefits (expense) at statutory rate                         |  |              | 35 
|Unrecognized tax benefits (expense) of current period tax losses |  |              | (35
|Effective tax rate                                               |  |              | -  



The Company had no uncertain tax positions that would necessitate recording of a tax related liability.



NOTE 7 - PRIVATE PLACEMENT OFFERING:



On September 7, 2007, the Company completed a private placement, pursuant to which 13,334 units (the "Units") were sold at a per Unit cash purchase price of $150, for a total subscribed amount of $2,000,100. Each Unit consists of: (1) one share of Series A 10% convertible preferred stock, par value $1.00, stated value $100 (the "Preferred Stock"); (2) 500 shares of the Company's common stock, par value $0.10 (the "Common Stock"); and (3) 500 warrants (the "Warrants") exercisable into Common Stock on a one-for-one basis. The proceeds of $2,000,100 were allocated to the instruments as follows:





|Warrant liabilities                        |  | $ | 141,027   | 
|------------------------------------------ |  | - | --------- | 
|Redeemable and Convertible Preferred Stock |  |   | 1,388,367 | 
|Common Stock                               |  |   | 470,706   | 
|Total allocated gross proceeds:            |  | $ | 2,000,100 | 



Warrants



2014 Extension of Warrant Terms



On August 31, 2014, 6,909,000 common share purchase warrants issued by the Company were modified to extend their maturity date to September 7, 2015. The exercise price and all other terms of the original warrant agreement remained the same. The warrants modification expense of $23,963 was computed as the incremental value of the modified warrants over the unmodified warrants on the modification date using a per share price of $0.15 per share, which was the contemporaneous private placement offering price. Assumptions used in the Black Scholes option-pricing model for these warrants were as follows:





|Average risk-free interest rate |  |  | 0.10  | %
|------------------------------- |  |  | ----- | -
|Average expected life- years    |  |  | 1     |  
|Expected volatility             |  |  | 56.64 | %
|Expected dividends              |  |  | 4.01  | %



2015 Extension of Warrant Terms



On August 31, 2015, 6,909,000 common share purchase warrants issued by the Company were modified to extend their maturity date to September 7, 2017. The exercise price and all other terms of the original warrant agreement remain the same. The warrants modification expense of $14,684 was computed as the incremental value of the modified warrants over the unmodified warrants on the modification date using a per share price of $0.15 per share, which was the contemporaneous private placement offering price. Assumptions used in the Black Scholes option-pricing model for these warrants were as follows:





|Average risk-free interest rate |  |  | 0.71  | %
|------------------------------- |  |  | ----- | -
|Average expected life- years    |  |  | 2     |  
|Expected volatility             |  |  | 49.01 | %
|Expected dividends              |  |  | 4.01  | %





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As of December 31, 2015, warrants to purchase 6,909,000 shares were outstanding, having exercise prices at $0.15 and an expiration date of September 7, 2017. As of December 31, 2014, warrants to purchase 6,909,000 shares were outstanding, having exercise prices at $0.15 and an expiration date of September 7, 2015.





|                          |  | 2015              |            |   | 2014                            |  
|------------------------- |  | ----------------- | ---------- | - | ------------------------------- | -
|                          |  | Number ofwarrants |            |   | Weighted average exercise price |  
|Balance at January 1      |  |                   | 6,909,000  |   |                                 | $
|Issued during the year    |  |                   | -          |   |                                 | $
|Exercised during the year |  |                   | -          |   |                                 | $
|Extended warrant terms    |  |                   | 6,909,000  |   |                                 | $
|Expired during the year   |  |                   | (6,909,000 | ) |                                 | $
|Balance at December 31    |  |                   | 6,909,000  |   |                                 | $



As of December 31, 2015 and 2014, the average remaining contractual life of the outstanding warrants was 1.69 year and 0.68 years, respectively. The Warrants expire on September 7, 2017.



Series A 10% Convertible Preferred Stock



The principal terms of the Series A 10% Convertible Preferred Stock were as follows:



Voting rights – The Series A 10% Convertible Preferred Stock has voting rights (one vote per share) equal to those of the Company's common stock.



Dividend rights – The Series A 10% Convertible Preferred Stock carries a fixed cumulative dividend, as and when declared by our Board of Directors, of 10% per annum, accrued daily, compounded annually and payable in cash upon a liquidation event for up to five years, as well as the right to receive any dividends paid to holders of common stock.



Conversion rights – The holders of the Series A 10% Convertible Preferred Stock have the right to convert any or all of their Series A 10% Convertible Preferred Stock, at the option of the holder, at any time, into common stock on a one for one thousand basis.



Redemption rights –The shares of the Series A 10% Convertible Preferred Stock may be redeemed by the Company, in whole or in part, at the option of the Company, upon written notice by the Company to the holders of Series A 10% Convertible Preferred Stock at any time in the event that the Preferred Stock of one or more holders has not been previously converted. The Company shall redeem each share of Preferred Stock of such holders within thirty (30) days of the Company's delivery of notice to such holders and such holders shall surrender the certificate(s) representing such shares of Preferred Stock.



Liquidation entitlement – In the event of any liquidation, dissolution or winding up of the Company, the holders of the Series A 10% Convertible Preferred Stock shall be entitled to receive, in preference to the holders of common stock, an amount equal to $100 per share of Series A 10% Convertible Preferred Stock plus all accrued and unpaid dividends.



At any time on or after August 2, 2011, the Holders of 66 2/3% or more of the Preferred Stock then outstanding could have requested liquidation of their Preferred Stock. In the event that, at the time of such requested liquidation, the Company's cash funds (in excess of a $50,000 reserve fund) then available to effect such requested liquidation were inadequate for such purpose, then such requested liquidation should have taken place (on a ratable basis) only to the extent such excess cash funds were available for such purpose.





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Other provisions – There will be proportional adjustments for stock splits, stock dividends, recapitalizations and the like.



Effective June 30, 2012, the holders of the Convertible Preferred Stock agreed to an amendment to the Series A 10% Convertible Preferred Stock which deleted the liquidation provisions. As a result, the Convertible Preferred Stock has been classified as equity (rather than temporary equity) in all filings beginning with the quarter ended June 30, 2012.



NOTE 8 - DIVIDENDS:



The Board of Directors declared a ten percent stock dividend on its outstanding Series A 10% Convertible Preferred Stock for shareholders of record as of November 15, 2015, and such shareholders received the stock dividend for each share of Series A Preferred Stock owned on that date, payable December 1, 2015. As of November 15, 2015, the Company had 27,466 shares of Preferred Stock outstanding; the total dividend paid consisted of 2,749 shares of Series A Preferred Stock (which are convertible into 2,749,000 shares of Common Stock) with a fair value of $274,900 and a total of 14 fractional shares which will be accumulated until whole shares can be issued. Due to the absence of Retained Earnings, the $2,749 par value of Preferred Stock dividend was charged against Additional Paid-in Capital.



NOTE 9 - STOCKHOLDERS' EQUITY:



The Company's 2008 Stock Awards Plan was approved April 9, 2008 by the Board of Directors and ratified at the Company's annual meeting of stockholders held on June 3, 2008. The 2008 Plan became effective April 9, 2008 and will terminate on April 8, 2018. Subject to certain adjustments, the number of shares of Common Stock that may be issued pursuant to awards under the 2008 Plan is 2,000,000 shares. A maximum of 80,000 shares may be granted in any one year in any form to any one participant, of which a maximum of (i) 50,000 shares may be granted to a participant in the form of stock options and (ii) 30,000 shares may be granted to a participant in the form of Common Stock or restricted stock. The 2008 Plan will be administered by a committee of the Board of Directors. Employees, including any employee who is also a director or an officer, consultants, and outside directors of the Company are eligible to participate in the 2008 Plan.



On June 24, 2013, the Company's Board approved the granting of incentive stock options to the 4 officers and 2 outside directors under the Company's 2008 Stock Awards Plan for the purchase of 200,000 and 100,000 shares with grant date on June 25, 2013, respectively of the Company's common stock at an exercise price of $0.03 per share on June 25, 2013.



Stock Option



The fair value of each option was estimated on June 25, 2013 (date of grant) using the following Black-Scholes assumptions:





|                                |  | Year ended December 31,2013 |       
|------------------------------- |  | --------------------------- | ------
|Expected term (in years)        |  |                             | 5     
|Expected stock price volatility |  |                             | 185.25
|Risk-free interest rate         |  |                             | 1.48  
|Expected dividend yield         |  |                             | -     



The Company vested 50% of the optioned shares on date of granting the stock options and 50% of the optioned shares vested on June 25, 2014.





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The following table summarizes all stock option activity under the plans:





|                                 |  | Number of Options |         |  | WeightedAverage Exercise Price |   |      | Weighted Average Remaining Contractual Life (Years) |  |  | AggregateIntrinsicValue | 
|-------------------------------- |  | ----------------- | ------- |  | ------------------------------ | - | ---- | --------------------------------------------------- |  |  | ----------------------- | 
|Outstanding at January 1, 2015   |  |                   | 300,000 |  |                                | $ | 0.03 |                                                     |  |  | 3.48                    | 
|Granted                          |  |                   | -       |  |                                |   | -    |                                                     |  |  | -                       | 
|Exercised                        |  |                   | -       |  |                                |   | -    |                                                     |  |  | -                       | 
|Forfeited/expired                |  |                   | -       |  |                                |   | -    |                                                     |  |  | -                       | 
|Outstanding at December 31, 2015 |  |                   | 300,000 |  |                                | $ | 0.03 |                                                     |  |  | 2.48                    | 
|                                 |  |                   |         |  |                                |   |      |                                                     |  |  |                         | 
|Exercisable at December 31, 2015 |  |                   | 300,000 |  |                                | $ | 0.03 |                                                     |  |  | 2.48                    | 



The Company recognized approximately $0 and $2,078 of stock based compensation costs related to stock options awards for the years ended December 31, 2015 and 2014, respectively.



The weighted-average grant date fair value of options outstanding at December 31, 2015 was $0.03.



As of December 31, 2015, the unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plan was $0.



NOTE 10 - FAIR VALUE MEASUREMENTS:



ASC 820, "Fair Value Measurements and Disclosure," ("ASC 820") defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, not adjusted for transaction costs. ASC 820 also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels giving the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).



The three levels are described below:



Level 1 Inputs — Unadjusted quoted prices in active markets for identical assets or liabilities that is accessible by the Company;



Level 2 Inputs — Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly;



Level 3 Inputs — Unobservable inputs for the asset or liability including significant assumptions of the Company and other market participants.



There were no transfers in or out of any level the year ended December 31, 2015 and 2014.



Except for those assets and liabilities which are required by authoritative accounting guidance to be recorded at fair value in the Company's balance sheets, the Company has elected not to record any other assets or liabilities at fair value, as permitted by ASC 820. No events occurred during the year ended December 31, 2015 which would require adjustment to the recognized balances of assets or liabilities which are recorded at fair value on a nonrecurring basis.





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



Cash equivalents at fair value — the Company's cash equivalents, at fair value, consist of money market funds — marked to market. The Company's money market funds are classified within Level 1 of the fair value hierarchy since they are valued using quoted market prices from an exchange.



The following tables provide information on those assets measured at fair value on a recurring basis as of December 31 2015 and December 31, 2014, respectively:





|                   |  | CarryingAmount InBalance SheetDecember 31, |         |  | Fair ValueDecember 31, |   |         | Fair Value Measurement Using | 
|------------------ |  | ------------------------------------------ | ------- |  | ---------------------- | - | ------- | ---------------------------- | 
|                   |  | 2015                                       |         |  | 2015                   |   |         | Level 1                      | 
|Assets:            |  |                                            |         |  |                        |   |         |                              | 
|Money Market Funds |  | $                                          | 973,470 |  |                        | $ | 973,470 |                              | 





|                   |  | CarryingAmount InBalance SheetDecember 31, |           |  | Fair ValueDecember 31, |   |           | Fair Value Measurement Using | 
|------------------ |  | ------------------------------------------ | --------- |  | ---------------------- | - | --------- | ---------------------------- | 
|                   |  | 2014                                       |           |  | 2014                   |   |           | Level 1                      | 
|Assets:            |  |                                            |           |  |                        |   |           |                              | 
|Money Market Funds |  | $                                          | 1,061,726 |  |                        | $ | 1,061,726 |                              | 



11 - COMMITMENTS AND CONTINGENCIES:



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







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