-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ECxvP536UctKUTHmnAfSGl/zq1WCYrtECUa0zL/LjoBjfctfC4ZSyMkkB+SVpRFM JTTUgrSkQbBtSZuShQVKrQ== 0001144204-06-045636.txt : 20061107 0001144204-06-045636.hdr.sgml : 20061107 20061107132157 ACCESSION NUMBER: 0001144204-06-045636 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20060930 FILED AS OF DATE: 20061107 DATE AS OF CHANGE: 20061107 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHASE PACKAGING CORP CENTRAL INDEX KEY: 0001025771 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE SERVICES [0700] IRS NUMBER: 931216127 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-21609 FILM NUMBER: 061193070 BUSINESS ADDRESS: STREET 1: POB 6199 STREET 2: 636 RIVER ROAD CITY: FAIRHAVEN STATE: NJ ZIP: 07704 BUSINESS PHONE: 732-741-1925 MAIL ADDRESS: STREET 1: POB 6199 STREET 2: 636 RIVER ROAD CITY: FAIRHAVEN STATE: NJ ZIP: 07704 10QSB 1 v056580.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, 2006 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 October 20, 2006 - -------------------------------------- ----------------------------------- 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, 2006 (Unaudited) and December 31, 2005 3. Statements of Operations (Unaudited) - Cumulative Period During the Development Stage (January 1, 1999 to September 30, 2006) and the Three and Nine Months Ended September 30, 2006 and 2005 4. Statements of Cash Flows (Unaudited) - Cumulative Period During the Development Stage (January 1, 1999 to September 30, 2006) and the Nine Months Ended September 30, 2006 and 2005 5. Notes to Interim Financial Statements (Unaudited) 6. ITEM 2. Management's Discussion and Analysis or Plan of Operation 8. ITEM 3. Controls and Procedures 8. PART II. Other Information 9. SIGNATURES 10. EXHIBITS
Page 2. PART I. FINANCIAL INFORMATION: ITEM I. FINANCIAL STATEMENTS: CHASE PACKAGING CORPORATION --------------------------- (A Development Stage Company) ----------------------------- BALANCE SHEETS -------------- - ASSETS -
September 30, December 31, 2006 2005 ----------- ----------- (unaudited) CURRENT ASSETS: Cash and cash equivalents $ 4,302 $ 1,186 TOTAL ASSETS $ 4,302 $ 1,186 =========== =========== - LIABILITIES AND SHAREHOLDERS' DEFICIT - CURRENT LIABILITIES: Accrued expenses $ 6,798 $ 9,484 Convertible notes payable 47,000 -- ----------- ----------- TOTAL CURRENT LIABILITIES 53,798 9,484 ----------- ----------- CONVERTIBLE NOTES PAYABLE -- 32,000 ----------- ----------- 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 2006 and 2005 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 (51,378) (42,180) ----------- ----------- (49,496) (40,298) ----------- ----------- $ 4,302 $ 1,186 =========== ===========
Page 3. CHASE PACKAGING CORPORATION --------------------------- (A Development Stage Company) ----------------------------- STATEMENTS OF OPERATIONS ------------------------ (Unaudited)
Cumulative During the Development Stage Three Months Ended Nine Months Ended (January 1, 1999 ------------------------- -------------------------- to September 30, September 30, September 30, 2006) 2006 2005 2006 2005 ----------- ----------- ----------- ----------- ----------- NET SALES $ -- $ -- $ -- $ -- $ -- ----------- ----------- ----------- ----------- ----------- COSTS AND EXPENSES: General and administrative expense 48,826 1,850 3,700 7,400 11,100 Interest expense 3,761 630 575 1,885 1,251 Interest and other income (1,209) (30) (17) (87) (33) ----------- ----------- ----------- ----------- ----------- TOTAL COSTS AND EXPENSES 51,378 2,450 4,258 9,198 12,318 ----------- ----------- ----------- ----------- ----------- (LOSS) BEFORE INCOME TAXES (51,378) (2,450) (4,258) (9,198) (12,318) Income tax expense -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- NET (LOSS) $ (51,378) $ (2,450) $ (4,258) $ (9,198) $ (12,318) =========== =========== =========== =========== =========== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 8,627,275 8,627,275 8,627,275 8,627,275 =========== =========== =========== =========== BASIC AND DILUTED (LOSS) PER COMMON SHARE $ -- $ -- $ -- $ -- =========== =========== =========== ===========
Page 4. CHASE PACKAGING CORPORATION --------------------------- (A Development Stage Company) ----------------------------- STATEMENTS OF CASH FLOWS ------------------------ (Unaudited) -----------
Cumulative During the Development Stage Nine Months Ended (January 1, 1999 to September 30, September 30, -------------------- 2006) 2006 2005 ----------- ----------- ----------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) $ (51,378) $ (9,198) $ (12,318) Change in assets and liabilities: Accounts payable and accrued expenses (16,481) (2,686) 121 ----------- ----------- ----------- Net cash (utilized) by operating activities (67,859) (11,884) (12,197) ----------- ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES -- -- -- ----------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from convertible notes 47,000 15,000 17,000 Proceeds from private placement/exercise of stock warrants 5,500 -- -- Proceeds from stock subscriptions 8,000 -- -- ----------- ----------- ----------- Net cash provided by financing activities 60,500 15,000 17,000 ----------- ----------- ----------- NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (7,359) 3,116 4,803 Cash and cash equivalents, at beginning of period 11,661 1,186 734 ----------- ----------- ----------- CASH AND CASH EQUIVALENTS, AT END OF PERIOD $ 4,302 $ 4,302 $ 5,537 =========== =========== =========== SUPPLEMENTAL CASH FLOW INFORMATION Cash paid during the period for: Interest $ -- $ -- $ --
Page 5. CHASE PACKAGING CORPORATION --------------------------- (A Development Stage Company) ----------------------------- NOTES TO FINANCIAL STATEMENTS ----------------------------- SEPTEMBER 30, 2006 ------------------ (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 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 stage company, in accordance with Statement of Financial Accounting Standards ("SFAS") No. 7, effective January 1, 1999. Managements' 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. 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, 2005 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 financial statements. In the opinion of management, the accompanying unaudited interim 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, 2006 and the results of its operations and cash flows for the three and nine month periods ended September 30, 2006 and 2005 and the cumulative period during the development stage, January 1, 1999 to September 30, 2006. NOTE 2 - LOSS PER COMMON SHARE: (Loss) per common share, both basic and diluted, was calculated by dividing net (loss) by the weighted average number of shares outstanding for each reporting period. The diluted loss per share is the same as the basic loss per share as the Company has incurred a net loss in all periods presented. The outstanding common stock equivalents that could potentially dilute basic earnings (loss) per share in the future that were not included in diluted earnings (loss) per share because their effect on the periods presented was antidilutive were 1,270,000 and 1,095,000 as of September 30, 2006 and 2005, respectively. Page 6. CHASE PACKAGING CORPORATION --------------------------- (A Development Stage Company) ----------------------------- NOTES TO FINANCIAL STATEMENTS ----------------------------- SEPTEMBER 30, 2006 ------------------ (Unaudited) 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. NOTE 4 - CONVERTIBLE DEBT: The Company has issued the following 5% Convertible Notes:
2004 third quarter $12,500 2005 first quarter 4,000 2005 second quarter 8,000 2005 third quarter 5,000 2005 fourth quarter 2,500 2006 first quarter 7,500 2006 second quarter 7,500 --------- $47,000
The investors are directors and an officer of the Company. The Notes are convertible into common stock at $0.01 or par value (currently $0.10 per share) whichever is greater. The Company and the Note Holders have the option to mutually extend the term of the Notes if the par value has not been reduced to $0.01. If the Notes are converted at par greater than $0.01, then the Note Holders will, upon conversion, receive a Unit consisting of one share of common stock and a 10-year warrant exercisable at the then par value of the common stock. The Company has analyzed the conversion feature as a embedded derivative using the guidance provided in SFAS 133 - 'Accounting for Derivative Instruments and Hedging Activities" and Emerging Issues Task Force 00-19 - "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock" and has concluded that the conversion feature is afforded equity classification. Interest will accrue and be paid at maturity and, if unpaid, added to principal at the time of conversion. The notes, which were originally due one year from issuance, have been extended and are all now due on July 15, 2007. Interest accrued and unpaid as of September 30, 2006 and December 31, 2005, aggregated $2,978 and $1,436, respectively. Page 7. 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 has generated 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 and the proceeds of convertible notes received through the first nine months of 2006, the Company's cash balance as of September 30, 2006 was $4,302. ITEM 3. CONTROLS AND PROCEDURES: (a) Evaluation of Disclosure Controls and Procedures. As of September 30, 2006, we carried out an evaluation, under the supervision of Allen McInnes, our Chief Executive Officer and Ann W. Green our 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 Chief Executive Officer and 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 periodic SEC filings. (b) Changes in Internal Control. Our evaluation, as described in subparagraph (a) above, did not disclose any changes during the last fiscal quarter in our internal controls over financial reporting that has materially affected or is reasonably likely to materially affect our internal controls over financial reporting. Page 8. 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 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 9. 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: November 3, 2006 Ann W. Green (Assistant Secretary and Principal Financial and Accounting Officer) Page 10. EX-31.1 2 v056580_ex31-1.txt Exhibit 31.1 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 officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have: a) designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated 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 and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this quarterly report based on such evaluation; and c) disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. November 3, 2006 ------------------------------------- Allen McInnes President and Chief Executive Officer EX-31.2 3 v056580_ex31-2.txt Exhibit 31.2 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 officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have: a) designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated 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 and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this quarterly report based on such evaluation; and c) disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. November 3, 2006 ------------------------------- Ann W. Green Assistant Secretary and Principal Financial Officer EX-32.1 4 v056580_ex32-1.txt Exhibit 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Chase Packaging Corporation (the "Company") on Form 10-QSB for the period ending September 30, 2006 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Allen McInnes President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. November 3, 2006 ------------------------------------- Allen McInnes President and Chief Executive Officer EX-32.2 5 v056580_ex32-2.txt Exhibit 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Chase Packaging Corporation (the "Company") on Form 10-QSB for the period ending September 30, 2006 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Ann W. Green, Assistant Secretary and Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. November 3, 2006 ------------------------------- Ann W. Green Assistant Secretary and Principal Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----