10QSB 1 v04285_10qsb.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 September 30, 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) c/o Ann W. Green, 636 River Road, Fairhaven, NJ 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 September 30, 2003 -------------------------------------- --------------------------------- Common Stock, par value $.10 per share 8,627,275 shares - INDEX -
PAGE(S) ------- PART I. Financial Information: ITEM 1. Financial Statements Balance Sheets - September 30, 2003 (Unaudited) and December 31, 2002 2. Statements of Operations (Unaudited) - Cumulative Period During the Development Stage (January 1, 1999 to September 30, 2003) and the Three and Nine Months Ended September 30, 2003 and 2002 3. Statements of Cash Flows (Unaudited) - Cumulative Period During the Development Stage (January 1, 1999 to September 30, 2003) and the Nine Months Ended September 30, 2003 and 2002 4. Notes to Interim Financial Statements (Unaudited) 5. ITEM 2. Management's Discussion and Analysis or Plan of Operation 6. PART II. Other Information 7. SIGNATURES 8.
Page 2. PART I. FINANCIAL INFORMATION: ITEM I. FINANCIAL STATEMENTS: CHASE PACKAGING CORPORATION (A DEVELOPMENT STAGE COMPANY) BALANCE SHEETS
- ASSETS - SEPTEMBER 30, 2003 December 31, 2002 ----------- ----------------- (UNAUDITED) CURRENT ASSETS: Cash and cash equivalents $ 1,073 $ 8,100 Miscellaneous receivable -- -- ----------- ----------- TOTAL ASSETS $ 1,073 $ 8,100 =========== =========== - LIABILITIES AND SHAREHOLDERS' DEFICIT - CURRENT LIABILITIES: Accrued expenses $ 25,982 $ 24,787 ----------- ----------- TOTAL CURRENT LIABILITIES 25,892 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 2002 and 2001 862,728 862,728 Additional paid-in capital 2,757,275 2,757,275 Common stock subscribed 8,000 -- Accumulated deficit (3,626,121) (3,626,121) Deficit accumulated during the development stage (26,791) (18,569) ----------- ----------- (24,909) (16,687) ----------- ----------- $ 1,073 $ 8,100 =========== ===========
See notes to financial statements. Page 3. CHASE PACKAGING CORPORATION (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF OPERATIONS (UNAUDITED)
CUMULATIVE DURING THE DEVELOPMENT STAGE Nine Months Ended (JANUARY 1, 1999 TO THREE MONTHS ENDED ---------------------------- SEPTEMBER 30, SEPTEMBER 30, September 30, 2003) 2003 2002 2003 2002 ----------- ----------- ----------- ----------- ----------- NET SALES $ -- $ -- $ -- $ -- $ -- ----------- ----------- ----------- ----------- ----------- COSTS AND EXPENSES: General and administrative expense 27,853 3,320 2,057 8,255 4,832 Interest and other income (1,062) (3) (9) (33) (39) ----------- ----------- ----------- ----------- ----------- TOTAL COSTS AND EXPENSES 26,791 3,317 2,048 8,222 4,793 ----------- ----------- ----------- ----------- ----------- (LOSS) BEFORE INCOME TAXES (26,791) (3,317) (2,048) (8,222) (4,793) Income tax expense -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- NET (LOSS) $ (26,791) $ (3,317) $ (2,048) $ (8,222) $ (4,793) =========== =========== =========== =========== =========== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 8,627,275 8,627,275 8,627,275 8,627,275 8,627,275 =========== =========== =========== =========== =========== (LOSS) PER COMMON SHARE $ -- $ -- $ -- $ -- $ -- =========== =========== =========== =========== ===========
See notes to financial statements. Page 4. CHASE PACKAGING CORPORATION (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF CASH FLOWS (UNAUDITED)
CUMULATIVE DURING THE DEVELOPMENT STAGE (JANUARY 1, 1999 TO Nine Months Ended SEPTEMBER 30, September 30, 2003 2003 2002 -------- -------- -------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) $(26,791) $ (8,222) $ (4,793) Change in assets and liabilities: Miscellaneous receivable -- -- (5,090) Accounts payable and accrued expenses 2,703 1,195 (2,500) -------- -------- -------- NET CASH (UTILIZED) BY OPERATING ACTIVITIES (24,088) (7,027) (12,383) CASH FLOWS FROM INVESTING ACTIVITIES -- -- -- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from private placement/exercise of stock warrants 13,500 -- 8,000 -------- -------- -------- NET (DECREASE) IN CASH AND CASH EQUIVALENTS (10,588) (7,027) (4,383) Cash and cash equivalents, at beginning of period 11,661 8,100 7,582 -------- -------- -------- CASH AND CASH EQUIVALENTS, AT END OF PERIOD $ 1,073 $ 1,073 $ 3,199 ======== ======== ======== SUPPLEMENTAL CASH FLOW INFORMATION Cash paid during the period for: Interest $ -- $ -- $ --
See notes to financial statements. Page 5. CHASE PACKAGING CORPORATION (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2003 (UNAUDITED) NOTE 1 - BASIS OF PRESENTATION: On June 25, 1997, Chase Packaging Corporation ("Chase" or "the Company") announced to employees and creditors that Chase would begin an orderly liquidation of all Chase's assets beginning at the close of business on June 30, 1997. On July 25, 1997, the Company notified its creditors by mail that the Company 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. 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. The Company ceased all operating activity as of June 30, 1997 and liquidation of all of its 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 September 30, 2003, the results of its operations for the three and nine month periods ended September 30, 2003 and 2002 and its cash flows for the nine month periods ended September 30, 2003. 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 - LOSS PER COMMON SHARE: Loss per common share for the three and nine month periods were calculated by dividing net loss for the period by the number of shares outstanding for the periods ended September 30, 2003 and 2002. 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. Page 6. ITEM 2. MANAGEMENT'S PLAN OF OPERATIONS: Chase Packaging Corporation (the Company) had experienced cash losses for the past years in spite of numerous infusions of working capital and an aggressive program of inventory and expense reduction. During 1997, the Board of Directors determined that an orderly liquidation was in the best interest of the Company and all of its creditors and retained the firm of Edward Hostmann, Inc. to assist the Company in such liquidation. As part of the liquidation process, effective July 21, 1997, the Company sold most of its assets in Idaho Falls, Idaho (excluding real estate) to Lockwood Packaging Corporation for $330,000. The Company also sold the Idaho Falls real estate (land and building). During July and August of 1997, Chase sold most of its inventory in Portland to other packaging companies. The Company also sold its band label extruder for $125,000 with remaining inventory and machinery and equipment sold at an August 14 auction for gross proceeds of approximately $340,000. As of December 31, 1997, the Company had completed the liquidation of all of its assets. Effective January 1, 1999, the Board of Directors has been devoting its efforts to establishing a new business and accordingly, the Company is being treated as a development stage company, in accordance with Statement of Financial Accounting Standards No. 7, as of that date. The Company continues to pay for minor administrative expenses and is generating interest income on its remaining cash balance. The Company's cash balance as of September 30, 2003 was $1,073. ITEM 3. CONTROLS AND PROCEDURES: (a) Evaluation of Disclosure Controls and Procedures. As of September 30, 2003, we carried out an evaluation, under the supervision of Ann W. Green our sole Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-14 of the Securities Exchange Act of 1934 (the "Exchange Act"), which disclosure controls and procedures are designed to insure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported within required time periods specified by the SEC's rules and forms. Based upon that evaluation, the Principal Financial Officer concluded that our disclosure controls and procedures are effective in timely alerting management to material information relating to the company required to be included in the company's period SEC filings. (b) Changes in Internal Control. Subsequent to the date of such evaluation as described in subparagraph (a) above, there were no significant changes in our internal controls or other factors that could significantly affect these controls, including any corrective action with regard to significant deficiencies and material weaknesses Page 7. 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 Exhibit 31.1 Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Exhibit 31.2 Certification of the Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Exhibit 32.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Exhibit 32.2 Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Page 8. 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 /s/ Ann W. Green ------------------------------------- Date: June 29, 2004 Ann W. Green (Assistant Secretary and Principal Financial and Accounting Officer) Page 9.