10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2019

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 incorporation or organization)	(I.R.S. Employer Identification No.)

106 West River Road, Rumson NJ 07760

(Address of principal executive offices) (Zip Code)

(732) 741-1500

(Registrant’s telephone number, including area code)

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 x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

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

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
(Do not check if a smaller reporting company)		Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes x No o

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	N/A	N/A

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 August 8, 2019
Common Stock, par value $.10 per share	61,479,759 shares

Table of Contents

- INDEX –

		Page(s)
PART I – Financial Information:
ITEM 1.	Financial Statements:		2
	Condensed Balance Sheets (Unaudited) – June 30, 2019 (Unaudited) and December 31, 2018		2
	Condensed Statements of Operations (Unaudited) – Three and Six Months Ended June 30, 2019 and 2018		3
	Condensed Statements of Changes in Stockholders’ Equity - Three and Six Months Ended June 30, 2019 and 2018		4
	Condensed Statements of Cash Flows (Unaudited) – Six Months Ended June 30, 2019 and 2018		5
	Notes to Interim Condensed Financial Statements (Unaudited)		6
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk		18
ITEM 4.	Controls and Procedures		18
PART II – Other Information:
ITEM 1.	Legal Proceedings.		19
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds.		19
ITEM 3.	Defaults upon Senior Securities.		19
ITEM 4.	Mine Safety Disclosures.		19
ITEM 5.	Other Information.		19
ITEM 6.	Exhibits.		19
SIGNATURES			20
EXHIBITS

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

CHASE PACKAGING CORPORATION

CONDENSED BALANCE SHEETS

(Unaudited) 

	June 30,			December 31,
	2019			2018
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	720,677		$	755,871
TOTAL ASSETS	$	720,677		$	755,871
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	554		$	3,269
TOTAL CURRENT LIABILITIES		554			3,269
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; 0 shares issued and 0 shares outstanding as of June 30, 2019 and December 31, 2018; liquidation preference of $0 and $0 as of June 30, 2019 and December 31, 2018		-			-
Common stock, $.10 par value 200,000,000 shares authorized; 61,479,759 shares issued (including 2,400,000 shares held in escrow) and 58,582,172 outstanding as of June 30, 2019; and 59,079,759 shares issued and 58,582,172 outstanding as of December 31, 2018		6,147,978			5,907,978
Treasury Stock, $.10 par value 497,587 shares as of June 30, 2019 and December 31, 2018		(49,759	)		(49,759	)
Additional paid-in capital		146,374			386,374
Accumulated deficit		(5,524,470	)		(5,491,991	)
TOTAL STOCKHOLDERS’ EQUITY		720,123			752,602
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	720,677		$	755,871

See notes to interim condensed unaudited financial statements.

2

CHASE PACKAGING CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

	For The Three Months Ended						For The Six Months Ended
	June 30,						June 30,
	2019			2018			2019			2018
NET SALES	$	-		$	-		$	-		$	-
EXPENSES:
General and administrative expense		11,857			14,846			36,963			28,320
LOSS FROM OPERATIONS		(11,857	)		(14,846	)		(36,963	)		(28,320	)
OTHER INCOME (EXPENSE)
Interest and other income		2,354			1,669			4,484			3,197
TOTAL OTHER INCOME (EXPENSE)		2,354			1,669			4,484			3,197
LOSS BEFORE INCOME TAXES		(9,503	)		(13,177	)		(32,479	)		(25,123	)
Provision for income taxes		-			-			-			-
NET LOSS	$	(9,503	)	$	(13,177	)	$	(32,479	)	$	(25,123	)
BASIC AND DILUTED LOSS PER COMMON SHARE	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING – BASIC AND DILUTED		59,582,172			15,536,275			60,582,172			15,536,275

See notes to interim condensed unaudited financial statements.

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CHASE PACKAGING CORPORATION

CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’S EQUITY

(UNAUDITED)

	Preferred				Common				Additional Paid-in			Accumulated			Treasury Stock
	Shares		Amount		Shares		Amount		Capital			Deficit			Shares			Amount			Total
Balance at December 31, 2017		36,562	$	2,067,776		16,033,862	$	1,603,387	$	2,623,189		$	(5,448,400	)		(497,587	)	$	(49,759	)	$	796,193
Net loss for the three months ended March 31, 2018		-		-		-		-		-			(11,946	)		-			-			(11,946	)
Balance at March 31, 2018		36,562	$	2,067,776		16,033,862	$	1,603,387	$	2,623,189		$	(5,460,346	)		(497,587	)	$	(49,759	)	$	784,247
Net loss for the three months ended June 30, 2018		-		-		-		-		-			(13,177	)		-			-			(13,177	)
Balance at June 30, 2018		36,562	$	2,067,776		16,033,862	$	1,603,387	$	2,623,189		$	(5,473,523	)		(497,587	)	$	(49,759	)	$	771,070
Balance at December 31, 2018		-	$	-		59,079,759	$	5,907,978	$	386,374		$	(5,491,991	)		(497,587	)	$	(49,759	)	$	752,602
Net loss for the three months ended March 31, 2019		-		-		-		-		-			(22,976	)		-			-			(22,976	)
Balance at March 31, 2019		-	$	-		59,079,759	$	5,907,978	$	386,374		$	(5,514,967	)		(497,587	)	$	(49,759	)	$	729,626
Shares held in escrow		-		-		2,400,000		240,000		(240,000	)		-			-			-			-
Net loss for the three months ended June 30, 2019		-		-		-		-		-			(9,503	)		-			-			(9,503	)
Balance at June 30, 2019		-	$	-		61,479,759	$	6,147,978	$	146,374		$	(5,524,470	)		(497,587	)	$	(49,759	)	$	720,123

See notes to interim condensed unaudited financial statements.

4

CHASE PACKAGING CORPORATION

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	For The Six Months Ended
	June 30,
	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(32,479	)		(25,123	)
Adjustment to reconcile to net loss to net cash used in operating activities:
Change in assets and liabilities:
Accounts payable and accrued expenses		(2,715	)		(8,581	)
Net cash used in operating activities		(35,194	)		(33,704	)
CASH FLOWS FROM INVESTING ACTIVITIES		-			-
CASH FLOWS FROM FINANCING ACTIVITIES		-			-
NET INCREASE (DECREASE) IN CASH		(35,194	)		(33,704	)
Cash,  beginning of period		755,871			805,743
CASH, END OF PERIOD	$	720,677			772,039
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for:
Interest	$	-		$	-
Income taxes	$	-		$	-
SCHEDULE OF NON-CASH INVESTING & FINANCING ACTIVITIES:
Shares issued and held in escrow	$	240,000		$	-

See notes to interim condensed unaudited financial statements.

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CHASE PACKAGING CORPORATION

NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS

June 30, 2019

(Unaudited)

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.

The interim condensed financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures made are adequate to provide for fair presentation and a reasonable understanding of the information presented. The Interim Condensed Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Form 10-Q should be read in conjunction with the financial statements and the related notes, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, previously filed with the SEC.

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of financial position as of June 30, 2019, results of operations for the six months and three months ended June 30, 2019 and 2018, and cash flows for the six months ended June 30, 2019 and 2018, as applicable, have been made. The results of operations for the six months and three months ended June 30, 2019 are not necessarily indicative of the operating results for the full fiscal year or any future periods.

The accounting policies followed by the Company are set forth in Note 3 to the Company’s financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2018, which is incorporated herein by reference. Specific reference is made to that report for a description of the Company’s securities and the notes to financial statements.

NOTE 2 - NEW ACCOUNTING PRONOUNCEMENTS:

Recently Adopted Accounting Pronouncements

Leases — In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 amends existing lease accounting guidance and requires recognition of most lease arrangements on the balance sheet. The adoption of this standard will result in the Company recognizing a right-of-use asset representing its rights to use the underlying asset for the lease term with an offsetting lease liability. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The adoption of this standard did not have a material impact on the Company’s financial position, results of operations or cash flows.

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Recent Accounting Pronouncements – To Be Adopted

Intangibles, Goodwill and Other — In January 2017, the FASB issued ASU No. 2017-04, “Intangibles – Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment” (“ASU No. 2017-04”). To simplify the subsequent measurement of goodwill, ASU No. 2017-04 eliminates Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, ASU No. 2017-04 requires an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. ASU No. 2017-04 also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. Therefore, the same impairment assessment applies to all reporting units. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU No. 2017-04 is effective for fiscal years beginning after December 15, 2019. The Company will adopt ASU No. 2017-04 commencing in the first quarter of fiscal 2021. The Company does not believe this standard will have a material impact on its financial statements or the related footnote disclosures.

ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement — This ASU modifies the disclosure requirements on fair value measurements in Topic 820, including the removal, modification to, and addition of certain disclosure requirements. This ASU will be effective for fiscal years beginning after December 15, 2019 with early adoption permitted. The majority of the disclosure changes are to be applied on a prospective basis. Although this ASU has a significant impact to the Company’s fair value disclosures, no additional impact is expected to the Company’s condensed consolidated financial statements.

The Company does not believe that other standards, which have been issued but are not yet effective, will have a significant impact on its financial statements.

NOTE 3 –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.

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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 June 30, 2019 and December 31, 2018, the Company had cash in insured accounts in the amount of $220,677 and $46,713, respectively, and cash equivalents (US treasury bills) held in financial institutions that were uninsured by Federal Deposit Insurance Corporation in the amount of approximately $500,000 and $709,158 respectively.

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 June 30, 2019 and December 31, 2018, 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.

Accounting for Stock Based Compensation

The stock-based compensation expense incurred by the Company for employees and directors in connection with its stock option plan is based on the employee model of ASC 718, and the fair market value of the options is measured at the grant date. Under ASC 718 employee is defined as “An individual over whom the grantor of a share-based compensation award exercises or has the right to exercise sufficient control to establish an employer-employee relationship based on common law as illustrated in case law and currently under U.S. “tax regulations.” Our consultants do not meet the employer-employee relationship as defined by the IRS and therefore are accounted for under ASC 505-50.

ASC 505-50-30-11 further provides that an issuer shall measure the fair value of the equity instruments in these transactions using the stock price and other measurement assumptions as of the earlier of the following dates, referred to as the measurement date:

i.	The date at which a commitment for performance by the counterparty to earn the equity instruments is reached (a performance commitment); and
ii.	The date at which the counterparty’s performance is complete.

We have elected to use the Black-Scholes-Merton pricing model to determine the fair value of stock options on the dates of grant. Restricted stock units are measured based on the fair market values of the underlying stock on the dates of grant.

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NOTE 4 - 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 6,909,000 common stock equivalents (preferred stock, warrants and stock options) from the calculation of diluted loss per share for the six months ended June 30, 2019 and 2018, which, if included, would have an antidilutive effect.

NOTE 5 – 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

2017 Extension of Warrant Terms

On August 24, 2017, 6,909,000 common share purchase warrants issued by the Company were modified to extend their maturity date to September 7, 2019. The exercise price and all other terms of the original warrant agreement remain the same. The warrants modification expense of $31,478 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:

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Average risk-free interest rate	1.27	%
Average expected life-years	2
Expected volatility	135.42	%
Expected dividends	0	%

	Number of Warrants		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
Outstanding at December 31, 2018		6,909,000	$	0.15		0.68
Granted		-		-		-
Exercised		-		-		-
Forfeited/expired		-		-		-
Outstanding at June 30, 2019		6,909,000	$	0.15		0.19
Exercisable at June 30, 2019		6,909,000	$	0.15		0.19

As of June 30, 2019 and December 31, 2018, the average remaining contractual life of the outstanding warrants was 0.19 years and 0.68 year, respectively. The warrants will expire on September 7, 2019.

On July 15, 2019, the warrants were modified to extend their maturity date to September 7, 2021. See NOTE 10 – SUBSEQUENT EVENTS

Series A 10% Convertible Preferred Stock

On December 31, 2018, all 36,562 Series A 10% Convertible Preferred Stocks were converted to 43,045,897 restricted Common stock, including 6,456,882 restricted Common stock paid for preferred shares dividend of $261,504. As of June 30, 2019, there was no preferred stock outstanding.

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.

10

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.

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

NOTE 6 – DIVIDENDS:

On December 31, 2018, all 36,562 Series A 10% Convertible Preferred Stocks were converted to 43,045,897 restricted Common stock, including 6,456,882 restricted Common stock paid for preferred shares dividend of $261,504.

NOTE 7 – 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 June 24, 2008 and terminated on June 24, 2018. Subject to certain adjustments, the number of shares of Common Stock that could be issued pursuant to awards under the 2008 Plan was 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 was 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. The 2008 Stock Awards Plan expired June 24, 2018; the Board of directors has not adopted a new stock awards plan.

On April 11, 2019, the Board of Directors authorized the issuance of 300,000 shares each to 7 directors and to the CFO/Asst. Sect, valued at approximately $9,300 each based on the closing bid price as quoted on the OTC on April 22, 2019 at $0.03 per share, and on June 28, 2019 the Board of Directors authorized the issuance of 300,000 shares to Matthew W. Long, a newly appointed board member, valued at approximately $27,000 based on the closing bid price as quoted on the OTC on June 28, 2019 at $0.09 per share. The 2,400,000 shares, held in escrow, are for merger/acquisition services to be performed in 2019. The escrow is pending shareholder approval of an amendment to the Certificate of Incorporation reducing the par value of Common stock from $0.10 to $0.01.

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NOTE 8 – 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 during the six months ended June 30, 2019 or 2018.

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 six months ended June 30, 2019 or 2018 which would require adjustment to the recognized balances of assets or liabilities which are recorded at fair value on a nonrecurring basis.

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.

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The following tables provide information on those assets measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018, respectively:

	Carrying Amount In Balance Sheet June 30,		Fair Value June 30,		Fair Value Measurement Using
	2019		2019		Level 1		Level 2		Level 3
Assets:
Treasury Bills	$	500,000	$	500,000	$	500,000	$	—	$	—
Money Market Funds		220,677		220,677		220,677		—		—
Total Assets	$	720,677	$	720,677	$	720,677	$	—	$	—

	Carrying Amount In Balance Sheet December 31,		Fair Value December 31,		Fair Value Measurement Using
	2018		2018		Level 1		Level 2		Level 3
Assets:
Treasury Bills	$	709,158	$	709,158	$	709,158	$	—	$	—
Money Market Funds		46,713		46,713		46,713		—		—
Total Assets	$	755,871	$	755,871	$	755,871	$	—	$	—

NOTE 9 - 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.

NOTE 10 – SUBSEQENT EVENTS:

On July 15, 2019, 6,909,000 common share purchase warrants issued by the Company were modified to extend their maturity date to September 7, 2021. The Company has evaluated subsequent events from the balance sheet date through the date these financial statements were issued, and has determined there are no additional events that require disclosure in accordance with ASC 855 Subsequent Events.

13

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

The information in this report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This Act provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information about themselves provided they identify these statements as forward looking and provide meaningful cautionary statements identifying important factors that could cause actual results to differ from the projected results. All statements other than statements of historical fact made in this report are forward looking. In particular, the statements herein regarding future results of operations or financial position are forward-looking statements. Forward-looking statements reflect management’s current expectations and are inherently uncertain. The Company’s actual results may differ significantly from management’s expectations as a result of many factors.

You should read the following discussion and analysis in conjunction with the financial statements of the Company, and notes thereto, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of management. The Company assumes no obligations to update any of these forward-looking statements.

Results of Operations

For the three months ended June 30, 2019 and 2018

Revenue

The Company had no operations and no revenue for the three months ended June 30, 2019 and 2018 and its only income was from interest income on its short-term investments which are classified as cash and cash equivalents.

Operating Expenses

The following table presents our total operating expenses for the three months ended June 30, 2019 and 2018.

	Three Months Ended June 30,
	2019		2018
Audit and accounting fees	$	4,980	$	5,663
Payroll expense		5,056		4,795
Other general and administrative expense		1,821		4,388
	$	11,857	$	14,846

Operating expenses consist mostly of audit and accounting fees and payroll. Other general and administrative expenses are comprised of transfer agent and EDGAR filer services and other services. These expenses were directly related to the maintenance of the corporate entity and the preparation and filing of reports with the Securities and Exchange Commission. The increase in operating expenses in 2019 was mainly due to the increase in audit and accounting fees and legal fees.

14

Loss from Operation

The Company incurred loss from operation of $11,857 and $14,846 for the three months ended June 30, 2019 and 2018, respectively.

Other Income (Expense)

The following table presents our total Other Income (Expense) for the three months ended June 30, 2019 and 2018.

	Three Months Ended June 30,
	2019		2018
Interest and other income	$	2,354	$	1,669
Other Income (Expense), net	$	2,354	$	1,669

Income (Expense) increased by $685 for the three months ended June 30, 2019 as compared to the three months ended June 30, 2018. The increase in other income (expense) was related to the increase in interest and other income for the three months ended June 30, 2019 as a result of an increase in our cash and cash equivalents.

Net Loss

The Company had a net loss of $9,503 for the three months ended June 30, 2019, compared with a net loss of $13,177 for the three months ended June 30, 2018. Net loss attributable to common stockholders was $9,503 for the three months ended June 30, 2019, compared to $13,177 for the three months ended June 30, 2018. Decreases in net loss attributable to common stockholders were due primarily to the decrease of general and administrative expense which was caused by the timing of when filing fee invoices were received.

Loss per share for the three months ended June 30, 2019 and 2018 were approximately $(0.00) and $(0.00) based on the weighted-average shares issued and outstanding.

It is anticipated that future operating expenses will increase as the Company complies with its periodic reporting requirements and effects a business combination, although there can be no assurance that the Company will be successful in effecting a business combination.

For the six months ended June 30, 2019 and 2018

Revenue

The Company had no operations and no revenue for the six months ended June 30, 2019 and 2018 and its only income was from interest income on its short-term investments which are classified as cash and cash equivalents.

15

Operating Expenses

The following table presents our total operating expenses for the six months ended June 30, 2019 and 2018.

	Six Months Ended June 30,
	2019		2018
Audit and accounting fees	$	21,664	$	10,688
Payroll expense		10,219		10,192
Other general and administrative expense		5,080		7,440
	$	36,963	$	28,320

Operating expenses consist mostly of audit and accounting fees and payroll. Other general and administrative expenses are comprised of transfer agent and EDGAR filer services and other services. These expenses were directly related to the maintenance of the corporate entity and the preparation and filing of reports with the Securities and Exchange Commission. The increase in operating expenses in 2019 was mainly due to the increase in stock-based compensation, audit and accounting fees and legal fees.

Loss from Operation

The Company incurred loss from operation of $36,963 and $28,320 for the six months ended June 30, 2019 and 2018, respectively.

Other Income (Expense)

The following table presents our total Other Income (Expense) for the six months ended June 30, 2019 and 2018.

	Six Months Ended June 30,
	2019		2018
Interest and other income	$	4,484	$	3,197
Other Income (Expense), net	$	4,484	$	3,197

Income (Expense) increased by $1,287 for the six months ended June 30, 2019 as compared to the six months ended June 30, 2018. The increase in other income (expense) was related to the increase in interest and other income for the six months ended June 30, 2019 as a result of an increase in our cash and cash equivalents.

Net Loss

The Company had a net loss of $32,479 for the six months ended June 30, 2019, compared with a net loss of $ 25,123 for the six months ended June 30, 2018. Net loss attributable to common stockholders was $32,479 for the six months ended June 30, 2019, compared to $ 25,123 for the six months ended June 30, 2018. Increases in net loss attributable to common stockholders were due primarily to the increase of professional fees related to audit and accounting expenses.  

16

Loss per share for the six months ended June 30, 2019 and 2018 were approximately $(0.00) and $(0.00) based on the weighted-average shares issued and outstanding.

It is anticipated that future operating expenses will increase as the Company complies with its periodic reporting requirements and effects a business combination, although there can be no assurance that the Company will be successful in effecting a business combination.

Liquidity and Capital Resources

At June 30, 2019 the Company had cash and cash equivalents of approximately $721,000 consisting mostly of money market funds and U.S. Treasury Bills. Management believes that its cash and cash equivalents are sufficient for its business activities for at least the next twelve months and for the costs of seeking an acquisition of an operating business.

The following table provides detailed information about our net cash flow for all financial statements years presented in this Report.

Cash Flow

	Six Months Ended June 30,
	2019			2018
Net cash used in operating activities	$	(35,194	)	$	(33,704	)
Net cash provided by investing activities		-			-
Net cash provided by financing activities		-			-
Net cash outflow	$	(35,194	)	$	(33,704	)

Net cash of $(35,194) and $(33,704) were used in operations during the six months period ended June 30, 2019 and 2018, respectively.

The use of cash of $(35,194) used in operating activities for the six months ended June 30, 2019, principally resulted from our net loss of $32,479, as adjusted for changes in accounts payable and accrued expenses of $(2,715).

The use of cash of $(33,704) used in operating activities for the six months ended June 30, 2018, principally resulted from our net loss of $25,123, as adjusted for changes in accounts payable and accrued expenses of $(8,581).

No cash flows were used in or provided by investing activities during the six months ended June 30, 2019 and 2018.

No cash proceeds were used in or provided by financing activities during the six months ended June 30, 2019 and 2018.

New Accounting Pronouncements

Refer to the discussion of recently adopted/issued accounting pronouncements under Part I, Note 2: New Accounting Policies Pronouncements.

17

Factors Which May Affect Future Results

Future earnings of the Company are dependent on interest rates earned on the Company’s invested balances and expenses incurred. The Company expects to incur significant expenses in connection with its objective of identifying a merger partner or acquiring an operating business.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures.

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our chief executive officer and chief financial officer concluded that as of June 30, 2019, our disclosure controls and procedures were effective.

Changes in Internal Controls over Financial Reporting.

We regularly review our system of internal control over financial reporting.

During the quarter ended June 30, 2019, there were no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to affect materially, our internal control over financial reporting.

18

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

Number	Description
31.1*	Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	Financial Statements from the quarterly report on Form 10-Q of Chase Packaging Corporation for the quarter ended June 30, 2019, filed on August 13, 2019, formatted in XBRL: (i) the Condensed Balance Sheets (Unaudited); (ii) the Condensed Statements of Operations (Unaudited); (iii) the Condensed Statements of Cash Flows (Unaudited); and (iv) the Notes to Interim Condensed Financial Statements (Unaudited).

________

* Filed herewith

19

 

SIGNATURES

Pursuant to the requirements 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: August 13, 2019	By:	/s/ Ann C. W. Green
		Ann C. W. Green
		Chief Financial Officer and Assistant Secretary
		(Principal Executive, Financial and Accounting Officer)

20

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ann C. W. Green, certify that:

1.	I have reviewed this report on Form 10-Q of Chase Packaging Corporation;
2.	Based on my knowledge, this 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 report;
3.	Based on my knowledge, the financial statements, and other financial information included in this 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 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and 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 report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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 the registrant’s board of directors (or persons performing the equivalent functions):

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.

Date: August 13, 2019	By:	/s/ Ann C. W. Green
		Ann C. W. Green
		Chief Financial Officer and Assistant Secretary
		(Principal Executive, Financial and Accounting Officer)

EX-32.1

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

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Chase Packaging Corporation (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the period ended June 30, 2019 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Form 10-Q.

The foregoing certification is being furnished as an exhibit to the Form 10-Q pursuant to Item 601(b)(32) of Regulation S-K and Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and, accordingly, is not being filed as part of the Form 10-Q for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Date: August 13, 2019	By:	/s/ Ann C. W. Green
		Ann C. W. Green
		Chief Financial Officer and Assistant Secretary
		((Principal Executive, Financial and Accounting Officer)

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 08, 2019
Document And Entity Information
Entity Registrant Name	CHASE PACKAGING CORP
Entity Central Index Key	0001025771
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	true
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Jun. 30, 2019
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2019
Entity Common Stock Shares Outstanding		61,479,759

XML

CONDENSED BALANCE SHEETS - USD ($)	Jun. 30, 2019	Dec. 31, 2018
CURRENT ASSETS:
Cash and cash equivalents	$ 720,677	$ 755,871
TOTAL ASSETS	720,677	755,871
CURRENT LIABILITIES:
Accounts payable and accrued expenses	554	3,269
TOTAL CURRENT LIABILITIES	554	3,269
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; 0 shares issued and 0 shares outstanding as of June 30, 2019 and December 31, 2018; liquidation preference of $0 and $0 as of June 30, 2019 and December 31, 2018
Common stock, $.10 par value 200,000,000 shares authorized; 61,479,759 shares issued (including 2,400,000 shares held in escrow) and 58,582,172 outstanding as of June 30, 2019; and 59,079,759 shares issued and 58,582,172 outstanding as of December 31, 2018	6,147,978	5,907,978
Treasury Stock, $.10 par value 497,587 shares as of June 30, 2019 and December 31, 2018	(49,759)	(49,759)
Additional paid-in capital	146,374	386,374
Accumulated deficit	(5,524,470)	(5,491,991)
TOTAL STOCKHOLDERS' EQUITY	720,123	752,602
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 720,677	$ 755,871

XML

CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
STOCKHOLDERS' EQUITY
Preferred stock, shares par value	$ 1.00	$ 1.00
Preferred stock, shares authorized	4,000,000	4,000,000
Common stock, shares par value	$ .10	$ .10
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	61,479,759	58,582,172
Common stock, shares outstanding	59,079,759	58,582,172
Common stock, held in escrow	2,400,000	2,400,000
Treasury stock, shares par value	$ .10	$ .10
Treasury stock, shares issued	497,587	497,587
10% Convertible Preferred Stock [Member]
STOCKHOLDERS' EQUITY
Convertible Preferred stock, shares authorized	50,000	50,000
Convertible Preferred stock, shares issued	0	0
Convertible Preferred stock, shares outstanding	0	0
Convertible Preferred stock, liquidation	0	0

XML

CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
NET SALES
EXPENSES:
General and administrative expense	11,857	14,846	36,963	28,320
LOSS FROM OPERATIONS	(11,857)	(14,846)	(36,963)	(28,320)
OTHER INCOME (EXPENSE)
Interest and other income	2,354	1,669	4,484	3,197
TOTAL OTHER INCOME (EXPENSE)	2,354	1,669	4,484	3,197
LOSS BEFORE INCOME TAXES	(9,503)	(13,177)	(32,479)	(25,123)
Provision for income taxes
NET LOSS	$ (9,503)	$ (13,177)	$ (32,479)	$ (25,123)
BASIC AND DILUTED LOSS PER COMMON SHARE	$ (0.00)	$ (0.00)	$ (0.00)	$ (0.00)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED	59,582,172	15,536,275	60,582,172	15,536,275

XML

CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS'S EQUITY - USD ($)	Total	Preferred Shares	Common Shares	Additional Paid-in Capital	Accumulated Deficit	Treasury Stock Shares
Beginning Balance, shares at Dec. 31, 2017		36,562	16,033,862			(497,587)
Beginning Balance, amount at Dec. 31, 2017	$ 796,193	$ 2,067,776	$ 1,603,387	$ 2,623,189	$ (5,448,400)	$ (49,759)
Net loss for the three months ended March 31, 2018	(11,946)				(11,946)
Ending Balance, shares at Mar. 31, 2018		36,562	16,033,862			(497,587)
Ending Balance, amount at Mar. 31, 2018	784,247	$ 2,067,776	$ 1,603,387	2,623,189	(5,460,346)	$ (49,759)
Net loss for the three months ended March 31, 2018	(13,177)				(13,177)
Ending Balance, shares at Jun. 30, 2018		36,562	16,033,862			(497,587)
Ending Balance, amount at Jun. 30, 2018	771,070	$ 2,067,776	$ 1,603,387	2,623,189	(5,473,523)	$ (49,759)
Beginning Balance, shares at Dec. 31, 2018			59,079,759			(497,587)
Beginning Balance, amount at Dec. 31, 2018	752,602		$ 5,907,978	386,374	(5,491,991)	$ (49,759)
Net loss for the three months ended March 31, 2018	(22,976)				(22,976)
Ending Balance, shares at Mar. 31, 2019			59,079,759			(497,587)
Ending Balance, amount at Mar. 31, 2019	729,626		$ 5,907,978	386,374	(5,514,967)	$ (49,759)
Net loss for the three months ended March 31, 2018	(9,503)				(9,503)
Shares held in escrow, shares			2,400,000
Shares held in escrow, amount			$ 240,000	(240,000)
Ending Balance, shares at Jun. 30, 2019			61,479,759			(497,587)
Ending Balance, amount at Jun. 30, 2019	$ 720,123		$ 6,147,978	$ 146,374	$ (5,524,470)	$ (49,759)

XML

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (32,479)	$ (25,123)
Change in assets and liabilities:
Accounts payable and accrued expenses	(2,715)	(8,581)
Net cash used in operating activities	(35,194)	(33,704)
CASH FLOWS FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
NET INCREASE (DECREASE) IN CASH	(35,194)	(33,704)
Cash, beginning of period	755,871	805,743
CASH, END OF PERIOD	$ 720,677	$ 772,039
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for:
Interest
Income taxes
SCHEDULE OF NON-CASH INVESTING & FINANCING ACTIVITIES:
Shares issued and held in escrow	$ 240,000

XML

BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2019

BASIS OF PRESENTATION

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. 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 Companys financial position, results of operations, and ability to continue as a going concern.

The interim condensed financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission ("the SEC"). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures made are adequate to provide for fair presentation and a reasonable understanding of the information presented. The Interim Condensed Financial Statements and Managements Discussion and Analysis of Financial Condition and Results of Operations included in this Form 10-Q should be read in conjunction with the financial statements and the related notes, as well as Managements Discussion and Analysis of Financial Condition and Results of Operations, included in the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2018, previously filed with the SEC.

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of financial position as of June 30, 2019, results of operations for the six months and three months ended June 30, 2019 and 2018, and cash flows for the six months ended June 30, 2019 and 2018, as applicable, have been made. The results of operations for the six months and three months ended June 30, 2019 are not necessarily indicative of the operating results for the full fiscal year or any future periods.

The accounting policies followed by the Company are set forth in Note 3 to the Companys financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2018, which is incorporated herein by reference. Specific reference is made to that report for a description of the Companys securities and the notes to financial statements.

XML

NEW ACCOUNTING PRONOUNCEMENTS

6 Months Ended

Jun. 30, 2019

NEW ACCOUNTING PRONOUNCEMENTS

Note 2 - NEW ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 amends existing lease accounting guidance and requires recognition of most lease arrangements on the balance sheet. The adoption of this standard will result in the Company recognizing a right-of-use asset representing its rights to use the underlying asset for the lease term with an offsetting lease liability. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The adoption of this standard did not have a material impact on the Companys financial position, results of operations or cash flows.

Recent Accounting Pronouncements To Be Adopted

Intangibles, Goodwill and Other In January 2017, the FASB issued ASU No. 2017-04, "Intangibles Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment" ("ASU No. 2017-04"). To simplify the subsequent measurement of goodwill, ASU No. 2017-04 eliminates Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, ASU No. 2017-04 requires an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting units fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. ASU No. 2017-04 also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. Therefore, the same impairment assessment applies to all reporting units. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU No. 2017-04 is effective for fiscal years beginning after December 15, 2019. The Company will adopt ASU No. 2017-04 commencing in the first quarter of fiscal 2021. The Company does not believe this standard will have a material impact on its financial statements or the related footnote disclosures.

ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework Changes to the Disclosure Requirements for Fair Value Measurement This ASU modifies the disclosure requirements on fair value measurements in Topic 820, including the removal, modification to, and addition of certain disclosure requirements. This ASU will be effective for fiscal years beginning after December 15, 2019 with early adoption permitted. The majority of the disclosure changes are to be applied on a prospective basis. Although this ASU has a significant impact to the Companys fair value disclosures, no additional impact is expected to the Companys condensed consolidated financial statements.

The Company does not believe that other standards, which have been issued but are not yet effective, will have a significant impact on its financial statements.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2019

BASIS OF PRESENTATION

NOTE 3 - 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 June 30, 2019 and December 31, 2018, the Company had cash in insured accounts in the amount of $220,677 and $46,713, respectively, and cash equivalents (US treasury bills) held in financial institutions that were uninsured by Federal Deposit Insurance Corporation in the amount of approximately $500,000 and $709,158 respectively.

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 Companys financial position, results of operations, or cash flows as a result of implementing this guidance. At June 30, 2019, and December 31, 2018, the Company evaluated its tax positions and did not have any unrecognized tax benefits. The Companys 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.

Accounting for Stock Based Compensation

The stock-based compensation expense incurred by the Company for employees and directors in connection with its stock option plan is based on the employee model of ASC 718, and the fair market value of the options is measured at the grant date. Under ASC 718 employee is defined as "An individual over whom the grantor of a share-based compensation award exercises or has the right to exercise sufficient control to establish an employer-employee relationship based on common law as illustrated in case law and currently under U.S. "tax regulations." Our consultants do not meet the employer-employee relationship as defined by the IRS and therefore are accounted for under ASC 505-50.

ASC 505-50-30-11 further provides that an issuer shall measure the fair value of the equity instruments in these transactions using the stock price and other measurement assumptions as of the earlier of the following dates, referred to as the measurement date:

i.	The date at which a commitment for performance by the counterparty to earn the equity instruments is reached (a performance commitment); and
ii.	The date at which the counterpartys performance is complete.

We have elected to use the Black-Scholes-Merton pricing model to determine the fair value of stock options on the dates of grant. Restricted stock units are measured based on the fair market values of the underlying stock on the dates of grant.

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BASIC AND DILUTED NET LOSS PER COMMON SHARE

6 Months Ended

Jun. 30, 2019

BASIC AND DILUTED NET LOSS PER COMMON SHARE

NOTE 4 - 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 6,909,000 common stock equivalents (preferred stock, warrants and stock options) from the calculation of diluted loss per share for the six months ended June 30, 2019 and 2018, which, if included, would have an antidilutive effect.

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PRIVATE PLACEMENT OFFERING

6 Months Ended

Jun. 30, 2019

PRIVATE PLACEMENT OFFERING

NOTE 5 - 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 Companys 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

2017 Extension of Warrant Terms

On August 24, 2017, 6,909,000 common share purchase warrants issued by the Company were modified to extend their maturity date to September 7, 2019. The exercise price and all other terms of the original warrant agreement remain the same. The warrants modification expense of $31,478 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	1.27	%
Average expected life-years	2
Expected volatility	135.42	%
Expected dividends	0	%

	Number of Warrants		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
Outstanding at December 31, 2018		6,909,000	$	0.15		0.68
Granted		-		-		-
Exercised		-		-		-
Forfeited/expired		-		-		-
Outstanding at June 30, 2019		6,909,000	$	0.15		0.19
Exercisable at June 30, 2019		6,909,000	$	0.15		0.19

As of June 30, 2019 and December 31, 2018, the average remaining contractual life of the outstanding warrants was 0.19 years and 0.68 year, respectively. The warrants will expire on September 7, 2019.

On July 15, 2019, the warrants were modified to extend their maturity date to September 7, 2021. See NOTE 10 SUBSEQUENT EVENTS

Series A 10% Convertible Preferred Stock

On December 31, 2018, all 36,562 Series A 10% Convertible Preferred Stocks were converted to 43,045,897 restricted Common stock, including 6,456,882 restricted Common stock paid for preferred shares dividend of $261,504. As of June 30, 2019, there was no preferred stock outstanding.

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 Companys 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 Companys 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 Companys 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.

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

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DIVIDENDS

6 Months Ended

Jun. 30, 2019

DIVIDENDS

NOTE 6 - DIVIDENDS

On December 31, 2018, all 36,562 Series A 10% Convertible Preferred Stocks were converted to 43,045,897 restricted Common stock, including 6,456,882 restricted Common stock paid for preferred shares dividend of $261,504.

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STOCKHOLDERS' EQUITY

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

NOTE 7 - STOCKHOLDERS' EQUITY

The Companys 2008 Stock Awards Plan was approved April 9, 2008 by the Board of Directors and ratified at the Companys annual meeting of stockholders held on June 3, 2008. The 2008 Plan became effective June 24, 2008 and terminated on June 24, 2018. Subject to certain adjustments, the number of shares of Common Stock that could be issued pursuant to awards under the 2008 Plan was 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 was 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. The 2008 Stock Awards Plan expired June 24, 2018; the Board of directors has not adopted a new stock awards plan.

On April 11, 2019, the Board of Directors authorized the issuance of 300,000 shares each to 7 directors and to the CFO/Asst. Sect, valued at approximately $9,300 each based on the closing bid price as quoted on the OTC on April 22, 2019 at $0.03 per share, and on June 28, 2019 the Board of Directors authorized the issuance of 300,000 shares to Matthew W. Long, a newly appointed board member, valued at approximately $27,000 based on the closing bid price as quoted on the OTC on June 28, 2019 at $0.09 per share. The 2,400,000 shares, held in escrow, are for merger/acquisition services to be performed in 2019. The escrow is pending shareholder approval of an amendment to the Certificate of Incorporation reducing the par value of Common stock from $0.10 to $0.01.

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FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2019

FAIR VALUE MEASUREMENTS

NOTE 8 - 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 during the six months ended June 30, 2019 or 2018.

Except for those assets and liabilities which are required by authoritative accounting guidance to be recorded at fair value in the Companys 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 six months ended June 30, 2019 or 2018 which would require adjustment to the recognized balances of assets or liabilities which are recorded at fair value on a nonrecurring basis.

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

Cash equivalents at fair value the Companys cash equivalents, at fair value, consist of money market funds marked to market. The Companys 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 June 30, 2019 and December 31, 2018, respectively:

	Carrying Amount In Balance Sheet June 30,		Fair Value June 30,		Fair Value Measurement Using
	2019		2019		Level 1		Level 2	Level 3
Assets:
Treasury Bills	$	500,000	$	500,000	$	500,000	$	$
Money Market Funds		220,677		220,677		220,677
Total Assets	$	720,677	$	720,677	$	720,677	$	$

	Carrying Amount In Balance Sheet December 31,		Fair Value December 31,		Fair Value Measurement Using
	2018		2018		Level 1		Level 2	Level 3
Assets:
Treasury Bills	$	709,158	$	709,158	$	709,158	$	$
Money Market Funds		46,713		46,713		46,713
Total Assets	$	755,871	$	755,871	$	755,871	$	$

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

NOTE 9 - COMMITMENTS AND CONTINGENCIES

The Companys Board of Directors has agreed to pay the Companys 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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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2019

SUBSEQUENT EVENTS

NOTE 10 - SUBSEQUENT EVENTS

On July 15, 2019, 6,909,000 common share purchase warrants issued by the Company were modified to extend their maturity date to September 7, 2021. The Company has evaluated subsequent events from the balance sheet date through the date these financial statements were issued, and has determined there are no additional events that require disclosure in accordance with ASC 855 Subsequent Events.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2019

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (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 June 30, 2019 and December 31, 2018, the Company had cash in insured accounts in the amount of $220,677 and $46,713, respectively, and cash equivalents (US treasury bills) held in financial institutions that were uninsured by Federal Deposit Insurance Corporation in the amount of approximately $500,000 and $709,158 respectively.

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 Companys financial position, results of operations, or cash flows as a result of implementing this guidance. At June 30, 2019, and December 31, 2018, the Company evaluated its tax positions and did not have any unrecognized tax benefits. The Companys 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.

Accounting for Stock Based Compensation

The stock-based compensation expense incurred by the Company for employees and directors in connection with its stock option plan is based on the employee model of ASC 718, and the fair market value of the options is measured at the grant date. Under ASC 718 employee is defined as "An individual over whom the grantor of a share-based compensation award exercises or has the right to exercise sufficient control to establish an employer-employee relationship based on common law as illustrated in case law and currently under U.S. "tax regulations." Our consultants do not meet the employer-employee relationship as defined by the IRS and therefore are accounted for under ASC 505-50.

ASC 505-50-30-11 further provides that an issuer shall measure the fair value of the equity instruments in these transactions using the stock price and other measurement assumptions as of the earlier of the following dates, referred to as the measurement date:

i.	The date at which a commitment for performance by the counterparty to earn the equity instruments is reached (a performance commitment); and
ii.	The date at which the counterpartys performance is complete.

We have elected to use the Black-Scholes-Merton pricing model to determine the fair value of stock options on the dates of grant. Restricted stock units are measured based on the fair market values of the underlying stock on the dates of grant.

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PRIVATE PLACEMENT OFFERING (Tables)

6 Months Ended

Jun. 30, 2019

PRIVATE PLACEMENT OFFERING (Tables)

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

Schedule of Share-based Compensation, Warrant Options

	Number of Warrants		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
Outstanding at December 31, 2018		6,909,000	$	0.15		0.68
Granted		-		-		-
Exercised		-		-		-
Forfeited/expired		-		-		-
Outstanding at June 30, 2019		6,909,000	$	0.15		0.19
Exercisable at June 30, 2019		6,909,000	$	0.15		0.19

Assumptions used in Black Scholes option-pricing model

Average risk-free interest rate	1.27	%
Average expected life-years	2
Expected volatility	135.42	%
Expected dividends	0	%

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FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2019

FAIR VALUE MEASUREMENTS (Tables)

Assets and liabilities measured at fair value on a recurring basis

The following tables provide information on those assets measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018, respectively:

	Carrying Amount In Balance Sheet June 30,		Fair Value June 30,		Fair Value Measurement Using
	2019		2019		Level 1		Level 2	Level 3
Assets:
Treasury Bills	$	500,000	$	500,000	$	500,000	$	$
Money Market Funds		220,677		220,677		220,677
Total Assets	$	720,677	$	720,677	$	720,677	$	$

	Carrying Amount In Balance Sheet December 31,		Fair Value December 31,		Fair Value Measurement Using
	2018		2018		Level 1		Level 2	Level 3
Assets:
Treasury Bills	$	709,158	$	709,158	$	709,158	$	$
Money Market Funds		46,713		46,713		46,713
Total Assets	$	755,871	$	755,871	$	755,871	$	$

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative)
Cash, FDIC insured	$ 220,677	$ 46,713
Cash, FDIC uninsured	$ 500,000	$ 709,158

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BASIC AND DILUTED NET LOSS PER COMMON SHARE (Details Narrative) - shares	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
BASIC AND DILUTED NET LOSS PER COMMON SHARE (Details Narrative)
Common stock equivalents (preferred stock and warrants)	6,909,000	6,909,000

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PRIVATE PLACEMENT OFFERING (Details)	Jun. 30, 2019 USD ($)
PRIVATE PLACEMENT OFFERING (Details)
Warrants liabilities	$ 141,027
Redeemable and Convertible Preferred Stock	1,388,367
Common Stock	470,706
Total allocated gross proceeds:	$ 2,000,100

XML

PRIVATE PLACEMENT OFFERING (Details 1)	6 Months Ended
	Jun. 30, 2019
PRIVATE PLACEMENT OFFERING (Details 1)
Average risk-free interest rate	1.27%
Average expected life- years	2 years
Expected volatility	135.42%
Expected dividends	0.00%

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PRIVATE PLACEMENT OFFERING (Details 2) - USD ($)	3 Months Ended	6 Months Ended	12 Months Ended
	Mar. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
Number of Warrants
Number of warrants/options outstanding, beginning	6,909,000
Granted during the year
Exercised during the year
Forfeited/expired during the year
Number of warrants/options outstanding, ending	6,909,000
Number of warrants exercisable during the year	$ 6,909,000
Weighted Average Exercise Price
Weighted average exercise price outstanding, beginning	$ 0.15	$ 0.15
Granted during the year
Exercised during the year
Forfeited/expired during the year
Weighted average exercise price outstanding, ending	0.15		$ 0.15
Weighted average exercisable price	$ 0.15
Weighted Average Remaining Contractual Life (Years)
Weighted average remaining contractual life outstanding, beginning	8 months 5 days	8 months 5 days
Granted during the year
Exercised during the year
Forfeited/expired during the year
Weighted average remaining contractual life outstanding, ending	2 months 8 days	2 months 8 days	8 months 5 days
Weighted avergage exercisable remaining contractual life	5 months 9 days

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PRIVATE PLACEMENT OFFERING (Details Narrative)		1 Months Ended	3 Months Ended	6 Months Ended	12 Months Ended
	Sep. 07, 2007 USD ($) integer $ / shares shares	Aug. 24, 2017 USD ($) $ / shares shares	Mar. 31, 2019 shares	Jun. 30, 2019 $ / shares	Dec. 31, 2018 USD ($) $ / shares
Expiry date				Sep. 07, 2019
Number of units sold | integer	13,334
Number of units sold, per unit | $ / shares	$ 150
Number of units sold for gross proceeds | $	$ 2,000,100
Percentage of convertible preferred stock	10.00%
Preferred Stock, Par Value | $ / shares	$ 1.00			$ 1.00	$ 1.00
Preferred Stock, Stated value | $	$ 100
Common Stock, Par Value | $ / shares	$ 0.10			$ .10	$ .10
Share issued | shares	500
Warrants modification expense | $					$ 31,478
Average remaining contractual life			2 months 8 days	2 months 8 days	8 months 5 days
Weighted average remaining contractual life outstanding, beginning			8 months 5 days	8 months 5 days
Number of warrants/options outstanding, beginning | shares			6,909,000
Warrant (Member) | 2017 Extension of Warrant Terms [Member]
Expiry date		Sep. 07, 2019
Warrants modification expense | $		$ 31,478
Number of warrants/options outstanding, beginning | shares		6,909,000
Per share price | $ / shares		$ 0.15
Series A 10% Convertible Preferred Stock [Member]
Liquidation entitlement description					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.
Preferred Stock conversion description					Series A 10% Convertible Preferred Stocks were converted to 43,045,897 restricted Common stock, including 6,456,882 restricted Common stock paid for preferred shares dividend of $261,504.

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DIVIDENDS (Details Narrative) - Series A Convertible Preferred stock [Member]	Dec. 31, 2018 USD ($) shares
Convertible preferred stock, shares converted	36,562
Restricted Stock [Member]
Conversion of convertible preferred stock, shares issued	43,045,897
Dividend [Member]
Conversion of convertible preferred stock, shares issued	6,456,882
Convertible preferred stock, dividend converted | $	$ 261,504

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STOCKHOLDERS' EQUITY (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 28, 2019	Apr. 11, 2019	Dec. 31, 2018	Jun. 24, 2008
Shares issued and held in escrow	$ 240,000
Reduction in par value description	The escrow is pending shareholder approval of an amendment to the Certificate of Incorporation reducing the par value of Common stock from $0.10 to $0.01.
Common stock, shares issued	61,479,759				58,582,172
Common stock, shares authorized	200,000,000				200,000,000
Stock options [Member]
Maximum shares granted						50,000
Restricted Stock [Member]
Maximum shares granted						30,000
MatthewWLong[Member]
Common stock, shares authorized
Common stock, shares authorized, value
Closing bid price
Directors And CFO [Member]
Common stock, shares authorized			300,000	300,000	200,000,000
Common stock, shares authorized, value			$ 27,000	$ 9,300
Closing bid price			$ 0.09	$ 0.03
2008 Stock Awards Plan [Member]
Common stock, shares issued						2,000,000
Maximum shares granted						80,000

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FAIR VALUE MEASUREMENTS (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Assets at fair value on recurring basis	$ 720,677	$ 755,871
Fair Value [Member]
Assets at fair value on recurring basis	720,677	755,871
Money Market Funds [Member]
Assets at fair value on recurring basis	220,677	46,713
Money Market Funds [Member] | Carrying Value [Member]
Assets at fair value on recurring basis	220,677	46,713
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Assets at fair value on recurring basis	220,677	46,713
Money Market Funds [Member] | Fair Value, Inputs, Level 2 [Member]
Assets at fair value on recurring basis
Money Market Funds [Member] | Fair Value, Inputs, Level 3 [Member]
Assets at fair value on recurring basis
Treasury Bills [Member] | Carrying Value [Member]
Assets at fair value on recurring basis	500,000	709,158
Treasury Bills [Member] | Fair Value, Inputs, Level 1 [Member]
Assets at fair value on recurring basis	500,000	709,158
Treasury Bills [Member] | Fair Value, Inputs, Level 2 [Member]
Assets at fair value on recurring basis
Treasury Bills [Member] | Fair Value, Inputs, Level 3 [Member]
Assets at fair value on recurring basis

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COMMITMENTS AND CONTINGENCIES (Details Narrative)	6 Months Ended
	Jun. 30, 2019 USD ($)
Chief Financial Officer [Member]
Annual salary	$ 17,000

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SUBSEQUENT EVENTS (Details Narrative)	Jul. 15, 2019 USD ($)
Subsequent Event [Member]
Common share purchase warrants	$ 6,909,000