10QSB 1 doc1.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2003 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File Number: 0-21609 CHASE PACKAGING CORPORATION ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Texas 93-1216127 ------------------------------------ ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 636 River Road, Fairhaven, New Jersey 07704 (Address of principal executive offices) (Zip Code) (732) 741-1500 ----------------------------------------------- (Issuer's telephone number, including area code) Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at March 31, 2003 ---------------------------------------- ------------------------------------- Common Stock, par value $.10 per share 8,627,275 shares
- INDEX - Page(s) PART I. Financial Information: ITEM 1. Financial Statements Condensed Balance Sheets - March 31, 2003 (Unaudited) and December 31, 2002 3. Condensed Statements of Operations (Unaudited) - Cumulative Period During the Development Stage (January 1, 1999 to March 31, 2003) and the Three Months Ended March 31, 2003 and 2002 4. Condensed Statements of Cash Flows (Unaudited) - Cumulative Period During the Development Stage (January 1, 1999 to March 31, 2003) and the Three Months Ended March 31, 2003 and 2002 5. Notes to Interim Condensed Financial Statements (Unaudited) 6. ITEM 2. Management's Discussion and Analysis or Plan of Operation 7. ITEM 3. Controls and Procedures 7. PART II. Other Information 8. Item 6 Exhibits and Reports on Form 8-K 9. SIGNATURES 10. EXHIBITS
PART I. FINANCIAL INFORMATION: ITEM I. FINANCIAL STATEMENTS: CHASE PACKAGING CORPORATION (A Development Stage Company) CONDENSED BALANCE SHEETS - ASSETS - March December 31, 2003 31, 2002 ------------ ----------- (unaudited) CURRENT ASSETS:gfv Cash and cash equivalents $ 5,612 $ 8,100 ------------ ------------ TOTAL ASSETS $ 5,612 $ 8,100 ============ ============ - LIABILITIES AND SHAREHOLDERS' DEFICIT - CURRENT LIABILITIES: Accrued expenses $ 25,982 $ 24,787 ------------ ------------ TOTAL CURRENT LIABILITIES 25,982 24,787 ------------------------ --------------------- COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' DEFICIT: Preferred stock $1.00 par value; 4,000,000 shares authorized, none issued - - Common stock, $.10 par value 25,000,000 authorized 8,627,275 issued in 2003 and 2002 862,728 862,728 Additional paid-in capital 2,757,275 2,757,275 Common stock subscribed 8,000 8,000 Accumulated deficit (3,626,121) (3,626,121) Deficit accumulated during the development stage (22,252) (18,569) ------------------------- ---------------------- (20,370) (16,687) ------------------------- ---------------------- $ 5,612 $ 8,100 ============ ============ See notes to financial statements.
CHASE PACKAGING CORPORATION (A Development Stage Company) STATEMENTS OF OPERATIONS (Unaudited) Cumulative During the Development Stage Three Months Ended (January 1, 1999 to March 31, ------------------ March 31, 2003) 2003 2002 --------------------- --------- --------- NET SALES $ - $ - $ - --------------------- ----------- --------- COSTS AND EXPENSES: General and administrative expense 23,298 3,700 500 Interest income (1,046) (17) (15) --------------------- -------------- -------------- TOTAL COSTS AND EXPENSES 22,252 3,683 485 -------------------- ------------- ------------- (LOSS) BEFORE INCOME TAXES (22,252) (3,683) (485) Income tax expense - - - -------------------- ------------- ------------ NET (LOSS) $ (22,252) $ (3,683) $ (485) ============ ============ ============ WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 7,575,819 8,627,275 8,132,275 ==================== ============= ============= (LOSS) PER COMMON SHARE $ - $ - $ - =========== =========== ==========
See notes to financial statements.
CHASE PACKAGING CORPORATION (A Development Stage Company) STATEMENTS OF CASH FLOWS (Unaudited) Cumulative During the Development Stage Three Months Ended (January 1, 1999 to March 31, ----------------------- March 31, 2003) 2003 2002 --------------- ---- ---- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) $ (22,252) $ (3,683) $ (485) Change in assets and liabilities: Accounts payable and accrued expenses 2,703 1,195 500 ------------------ ------------- ------------- Net cash (utilized) provided by operating activities (19,549) (2,488) 15 CASH FLOWS FROM INVESTING ACTIVITIES - - - CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from private placement/exercise of stock warrants 13,500 - - ------------------ ------------- ------------ NET (DECREASE) INCREASE IN CASH (6,049) (2,488) 15 CASH AND CASH EQUIVALENTS, AT BEGINNING OF PERIOD 11,661 8,100 7,582 ------------------ ------------- ------------- CASH AND CASH EQUIVALENTS, AT END OF PERIOD $ 5,612 $ 5,612 $ 7,597 ========== ========= ========= SUPPLEMENTAL CASH FLOW INFORMATION Cash paid during the period for: Interest $ - $ - $ -
See notes to financial statements. CHASE PACKAGING CORPORATION (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS MARCH 31, 2003 (Unaudited) 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 the past years, and the Company's secured lender decided not to renew the Company's operating line of credit. As a result, the Company's Board of Directors determined that it was in the best interest of the Company and all of its creditors to liquidate in an orderly fashion. On June 25, 1997, the Company announced to employees and creditors that it would begin an orderly liquidation of all its assets beginning at the close of business on June 30, 1997. On July 25, 1997, the Company notified its creditors by mail that it would commence with an orderly liquidation of all its remaining assets outside of a formal bankruptcy or receivership proceeding in a manner intended to maximize asset values. Liquidation of the Company's assets was completed as of December 31, 1997. The Board of Directors has been devoting its efforts to establishing a new business and, accordingly, the Company is being treated as a development state stage company, in accordance with Statement of Financial Accounting Standards No. 7, effective January 1, 1999. In the opinion of management, the accompanying unaudited interim condensed financial statements of the Company, contain all adjustments necessary (consisting of normal recurring accruals or adjustments only) to present fairly the Company's financial position as of March 31, 2003 and the results of its operations and cash flows for the three month periods ended March 31, 2003 and 2002. The accounting policies followed by the Company are set forth in Note 2 to the Company's financial statements included in its Annual Report on Form 10-KSB for the year ended December 31, 2002 which is incorporated herein by reference. Specific reference is made to this report for a description of the Company's securities and the notes to consolidated financial statements. NOTE 2 - INCOME (LOSS) PER COMMON SHARE: Income (loss) per common share was calculated by dividing net income (loss) by the weighted average number of shares outstanding for each reporting period. NOTE 3 - SHAREHOLDERS' EQUITY: In July 2002, the Company received $8,000 as payment for 800,000 shares of common stock. Such shares have not been issued as of the filing of this report. ITEM 2. MANAGEMENT'S PLAN OF OPERATIONS: Chase Packaging Corporation (the Company) experienced cash losses for past years in spite of numerous infusions of working capital and an aggressive program of inventory and expense reductions. During 1997, the Board of Directors determined that an orderly liquidation was in the best interest of the Company and all of its creditors and retained the firm of Edward Hostmann, Inc. to assist the Company in such liquidation. As part of the liquidation process, effective July 21, 1997, the Company sold most of its assets in Idaho Falls, Idaho (excluding real estate) to Lockwood Packaging Corporation for $330,000. The Company also sold the Idaho Falls real estate (land and building). During July and August of 1997 Chase sold most of its inventory in Portland, Oregon to other packaging companies. The Company also sold its band label extruder for $125,000 and its remaining inventory and machinery and equipment were sold at an August 14, 1997 auction, for gross proceeds of approximately $340,000. As of December 31, 1997, the Company had completed the liquidation of all of its assets. Effective January 1, 1999, the Board of Directors has been devoting its efforts to establishing a new business and accordingly, the Company is being treated as a development stage company, in accordance with Statement of Financial Accounting Standards No. 7, as of that date. The Company continues to pay for minor administrative expenses and is generating interest income on its remaining cash balance As a result of the sale of common shares in a private placement and the exercise of common stock purchase warrants during the last quarter of 2001 as well as additional capital contributions during 2002, the Company's cash balance as of March 31, 2003 was $5,612. ITEM 3. CONTROLS AND PROCEDURES: An evaluation was performed, as of March 31, 2003, by our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on such evaluation, our management has concluded that our disclosure controls and procedures were effective as of March 31, 2003. There have been no significant changes in our internal controls or in other factors that could significantly affect our internal controls subsequent to March 31, 2002. PART II. OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities None Item 3. Defaults upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports None
Exhibit 99.1 Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Acto of 2002. Exhibit 99.2 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
SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CHASE PACKAGING CORPORATION --------------------------- Date: May 15, 2003 Ann W. Green (Assistant Secretary and Principal Financial and Accounting Officer) CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Allen McInnes, president and principal executive officer of Chase Packaging Corporation, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Chase Packaging Corporation; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidating subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date. 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. May 15, 2003 --------------- Allen McInnes CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Ann W. Green, assistant secretary and principal financial and accounting officer of Chase Packaging Corporation, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Chase Packaging Corporation; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidating subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date. 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): d) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and e) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. May 15, 2003 ------------------------ Ann W. Green CHASE PACKAGING CORPORATION QUARTERLY REPORT ON FORM 10-QSB QUARTER ENDED MARCH 31, 2003 EXHIBIT INDEX Exhibit Number Description ------ ------------ 99.1 Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002. 99.2 Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.