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 March 31, 2020

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)

Delaware	93-1216127
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

PO Box 126, Rumson NJ 07760

(Address of principal executive offices) (Zip Code)

 (732) 741-1500

(Registrant’s telephone number, including area code)

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

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	x	Smaller reporting company	x
		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. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. 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 May 4, 2020
Common Stock, par value $.00001 per share	61,882,172 shares

Table of Contents

- INDEX –

		Page(s)
PART I – Financial Information:
ITEM 1.	Financial Statements:		3
	Condensed Balance Sheets (Unaudited) – March 31, 2020 and December 31, 2019		3
	Condensed Statements of Operations (Unaudited) – Three Months Ended March 31, 2020 and 2019		4
	Condensed Statement of Changes in Stockholders’ Equity for the  Three Months Ended March 31, 2020 and 2019 (Unaudited)		5
	Condensed Statements of Cash Flows (Unaudited) – Three Months Ended March 31, 2020 and 2019		6
	Notes to Interim Condensed Financial Statements (Unaudited)		7
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk		15
ITEM 4.	Controls and Procedures		16
PART II – Other Information:
ITEM 1.	Legal Proceedings.		17
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds.		17
ITEM 3.	Defaults upon Senior Securities.		17
ITEM 4.	Mine Safety Disclosures.		17
ITEM 5.	Other Information.		17
ITEM 6.	Exhibits.		17
SIGNATURES			18
EXHIBITS

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

CHASE PACKAGING CORPORATION

CONDENSED BALANCE SHEETS

(Unaudited)

	March 31,			December 31,
	2020			2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	647,125		$	679,147
TOTAL ASSETS	$	647,125		$	679,147
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	3,774		$	9,919
TOTAL CURRENT LIABILITIES		3,774			9,919
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; no shares issued and outstanding		-			-
Common stock, $0.00001 par value 200,000,000 shares authorized; 61,479,759 shares issued and 60,982,172 outstanding as of March 31, 2020 and December 31, 2019		615			615
Treasury stock, $0.00001 par value 497,587 shares as of March 31, 2020 and December 31, 2019		(49,759	)		(49,759	)
Additional paid-in capital		6,953,031			6,953,031
Accumulated deficit		(6,260,536	)		(6,234,659	)
TOTAL STOCKHOLDERS’ EQUITY		643,351			669,228
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	647,125		$	679,147

See notes to interim condensed unaudited financial statements. 

3

 CHASE PACKAGING CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

	For The Three Months Ended
	March 31,
	2020			2019
NET SALES	$	-		$	-
EXPENSES:
General and administrative expense		26,834			25,106
LOSS FROM OPERATIONS		(26,834	)		(25,106	)
OTHER INCOME (EXPENSE)
Interest income		957			2,130
TOTAL OTHER INCOME (EXPENSE)		957			2,130
LOSS BEFORE INCOME TAXES		(25,877	)		(22,976	)
Provision for income taxes		-			-
NET LOSS	$	(25,877	)	$	(22,976	)
LOSS PER COMMON SHARE – BASIC AND DILUTED	$	(0.00	)	$	(0.00	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING – BASIC AND DILUTED		60,982,172			58,582,172

See notes to interim condensed unaudited financial statements. 

4

CHASE PACKAGING CORPORATION

CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

THREE MONTHS ENDED MARCH 31, 2020 AND 2019

(Unaudited)

	Preferred				Common				Additional Paid-in		Accumulated			Treasury Stock
	Shares		Amount		Shares		Amount		Capital		Deficit			Shares			Amount			Total
Balance at December 31, 2018		-	$	-		59,079,759	$	591	$	6,293,761	$	(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	$	591	$	6,293,761	$	(5,514,967	)		(497,587	)	$	(49,759	)	$	729,626
Balance at December 31, 2019		-	$	-		61,479,759	$	615	$	6,953,031	$	(6,234,659	)		(497,587	)	$	(49,759	)	$	669,228
Net loss for the three months ended March 31, 2020		-		-		-		-		-		(25,877	)		-			-			(25,877	)
Balance at March 31, 2020		-	$	-		61,479,759	$	615	$	6,953,031	$	(6,260,536	)		(497,587	)	$	(49,759	)	$	643,351

See notes to interim condensed unaudited financial statements.

5

CHASE PACKAGING CORPORATION

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	For The Three Months Ended
	March 31,
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(25,877	)		(22,976	)
Adjustment to reconcile to net loss to net cash used in operating activities:
Change in operating assets and liabilities:
Accounts payable and accrued expenses		(6,145	)		8,198
Net cash used in operating activities		(32,022	)		(14,778	)
CASH FLOWS FROM INVESTING ACTIVITIES		-			-
CASH FLOWS FROM FINANCING ACTIVITIES		-			-
NET DECREASE IN CASH		(32,022	)		(14,778	)
Cash, beginning of period		679,147			755,871
CASH, END OF PERIOD	$	647,125			741,093
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for:
Interest	$	-		$	-
Income taxes	$	-		$	-

See notes to interim condensed unaudited financial statements.

6

CHASE PACKAGING CORPORATION

NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS

March 31, 2020

(Unaudited)

NOTE 1 - BASIS OF PRESENTATION:

Chase Packaging Corporation (“the Company”), a Delaware 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, 2019, 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 March 31, 2020, results of operations for the three months ended March 31, 2020 and 2019, and cash flows for the three months ended March 31, 2020 and 2019, as applicable, have been made. The results of operations for the three months ended March 31, 2020 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, 2019, 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.

Compensation – Stock Compensation — In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 allows companies to account for nonemployee awards in the same manner as employee awards. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those annual periods. The Company adopted this ASU on January 1, 2019. The adoption of ASU 2018-07 did not have a material impact on the Company’s financial position, results of operations or cash flows.

7

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 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.

8

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 March 31, 2020, and December 31, 2019, the Company had cash in insured accounts in the amount of $147,125 and $179,147, respectively, and cash equivalents (Treasury and government securities) held in financial institutions that were uninsured by Federal Deposit Insurance Corporation in the amount of approximately $500,000 and $500,000 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 March 31, 2020, and December 31, 2019, 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. Effective January 1, 2019, the Company adopted ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.

The Company followed the accounting guidance in ASC 505-50-30-11, until January 1, 2019 which 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.

Upon the adoption of ASU 2018-07, the Company measured the fair value of equity instruments for nonemployee based payment awards on the grant date.

9

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 and 6,909,000 common stock equivalents (warrants and stock options - Note 5) from the calculation of diluted loss per share for the three months ended March 31, 2020 and 2019 respectively, which, if included, would have an antidilutive effect.

NOTE 5 - WARRANTS AND PREFERRED STOCKS:

Warrants

2019 Extension of Warrant Terms

On July 9, 2019, 6,909,000 common share purchase warrants issued by the Company were modified to extend their maturity date to September 7, 2021. The exercise price and all other terms of the original warrant agreement remain the same. The warrants modification expense of $567,194 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	1.58	%
Average expected life-years	2
Expected volatility	172.88	%
Expected dividends	0	%

	Number of Warrants		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
Outstanding at December 31, 2019		6,909,000	$	0.15		1.69
Granted		-		-		-
Extended
Exercised		-		-		-
Forfeited/expired		-		-		-
Outstanding at March 31, 2020		6,909,000	$	0.15		1.44
Exercisable at March  31, 2020		6,909,000	$	0.15		1.44

As of March 31, 2020 and December 31, 2019, the average remaining contractual life of the outstanding warrants was 1.44 years and 1.68 year, respectively. The warrants will expire on September 7, 2021.

Series A 10% Convertible Preferred Stock

The Company has authorized 4,000,000 shares of Series A 10% Convertible Preferred Stock.  As of December 31, 2019, there was no preferred stock outstanding.

10

NOTE 6 –  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 three months ended March 31, 2020 and the year ended December 31, 2019.

Except for those assets and liabilities which are required by authoritative accounting guidance to be recorded at fair value in the Company’s balance sheets, the Company has elected not to record any other assets or liabilities at fair value, as permitted by ASC 820. No events occurred during the year ended December 31, 2019 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.

The following tables provide information on those assets measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019, respectively:

	Carrying Amount In Balance Sheet March 31,		Fair Value March 31,		Fair Value Measurement Using
	2020		2020		Level 1		Level 2		Level 3
Assets:
Treasury and government securities	$	500,000	$	500,000	$	500,000
Money market funds		147,125		147,125		147,125
Total Assets	$	647,125	$	647,125	$	647,125	$	—	$	—

11

	Carrying Amount In Balance Sheet December 31,		Fair Value December 31,		Fair Value Measurement Using
	2019		2019		Level 1		Level 2		Level 3
Assets:
Treasury and government securities	$	500,000	$	500,000	$	500,000
Money market funds		179,147		179,147		179,147
Total Assets	$	679,147	$	679,147	$	679,147	$	—	$	—

NOTE 7 - 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 cash compensation other than reimbursement of out-of-pocket expenses incurred in connection with Company business and development. 

NOTE 8 – SUBSEQUENT EVENTS:

On April 20, 2020, the Board of Directors authorized the issuance of 100,000 shares of restricted common stock each to 7 directors and to the CFO/Assistant. Secretary, valued at approximately $10,000 each based on the closing bid price as quoted on the OTC on April 17, 2020 of $0.10 per share reflecting the last trade on April 8, 2020.  On April 23, 2020, the Board of Directors authorized a consulting fee to be paid to William R. Cast in the form of 100,000 shares of restricted common stock valued at approximately $10,000 based on the closing bid price as quoted on the OTC on April 22, 2020 of $0.10 per share reflecting the last trade on April 8, 2020. 

The Company has evaluated subsequent events through the date these financial statements were issued and noted no additional events requiring disclosure.

12

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 March 31, 2020 and 2019

Revenue

The Company had no operations and no revenue for the three months ended March 31, 2020 and 2019, 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 March 31, 2020 and 2019.

	Three Months Ended March 31,
	2020		2019
Audit and accounting fees		16,644		16,664
Payroll		5,173		5,163
Other general and administrative expense		5,017		3,279
	$	26,834	$	25,106

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 2020 was mainly due to the increase in legal and transfer agent fees.

13

Loss from Operation

The Company incurred loss from operation of $26,834 and $25,106 for the three months ended March 31, 2020 and 2019, respectively.

Other Income (Expense)

The following table presents our total Other Income (Expense) for the three months ended March 31, 2020 and 2019.

	Three Months Ended March 31,
	2020		2019
Interest and other income	$	957	$	2,130
Other Income (Expense), net	$	957	$	2,130

Income (Expense) decreased by $1,173 for the three months ended March 31, 2020 as compared to the three months ended March 31, 2019. The decrease in other income (expense) was related to the decrease in interest and other income for the three months ended March 31, 2020

Net Loss

The Company had a net loss of $25,877 for the three months ended March 31, 2020, compared with a net loss of $22,976 for the three months ended March 31, 2019. Increase in net loss was due primarily to the increase of general and administrative expense.

Loss per share for the three months ended March 31, 2020 and 2019 was approximately $(0.00) and $(0.00) based on the weighted-average shares issued and outstanding.

It is anticipated that future operating expenses will decrease 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 March 31, 2020, the Company had cash and cash equivalents of approximately $647,000 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.

14

Cash Flow 

	Three Months Ended March 31,
	2020			2019
Net cash used in operating activities	$	(32,022	)	$	(14,778	)
Net cash provided by investing activities		-			-
Net cash provided by financing activities		-			-
Net cash outflow	$	(32,022	)	$	(14,778	)

Net cash of $(32,022) and $(14,778) were used in operations during the three months period ended March 31, 2020 and 2019, respectively.

The use of cash of $(32,022) used in operating activities for the three months ended March 31, 2020, principally resulted from our net loss of $25,877, as adjusted for changes in our working capital accounts of $6,145.

The use of cash of $(14,778) used in operating activities for the three months ended March 31, 2019, principally resulted from our net loss of $22,976, as adjusted for changes in our working capital accounts of $(8,198).

No cash flows were used in or provided by investing activities during the three months ended March 31, 2020 and 2019.

No cash proceeds were used in or provided by financing activities during the three months ended March 31, 2020 and 2019.

New Accounting Pronouncements

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

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.

15

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-15I 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 March 31, 2020, 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 March 31, 2020, 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.

16

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

None.

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

On April 20, 2020, the Board of Directors authorized the issuance of 100,000 shares of restricted common stock each to 7 directors and to the CFO/Assistant Secretary, valued at approximately $10,000 each based on the closing bid price as quoted on the OTC on April 17, 2020 of $0.10 per share reflecting the last trade on April 8, 2020.  On April 23, 2020, the Board of Directors authorized a consulting fee to be paid to William R. Cast in the form of 100,000 shares of restricted common stock valued at approximately $10,000 based on the closing bid price as quoted on the OTC on April 22, 2020 of $0.10 per share reflecting the last trade on April 8, 2020.   There were no proceeds to the Company and no disclosure for any use of proceeds.

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	Interactive data files pursuant to Rule 405 of Regulation S-T.

_____________

* Filed herewith

17

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: May 8, 2020	By:	/s/ Ann C. W. Green
		Ann C. W. Green
		Chief Financial Officer and Assistant Secretary
		(Principal Executive, Financial and Accounting Officer)

18

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: May 8, 2020	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 March 31, 2020 (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: May 8, 2020	By:	/s/ Ann C. W. Green
		Ann C. W. Green
		Chief Financial Officer and Assistant Secretary
		((Principal Executive, Financial and Accounting Officer)

XML

BASIC AND DILUTED NET LOSS PER COMMON SHARE

3 Months Ended

Mar. 31, 2020

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 and 6,909,000 common stock equivalents (warrants and stock options - Note 5) from the calculation of diluted loss per share for the three months ended March 31, 2020 and 2019 respectively, which, if included, would have an antidilutive effect.

XML

SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2020

SUBSEQUENT EVENTS

NOTE 8 - SUBSEQUENT EVENTS

On April 20, 2020, the Board of Directors authorized the issuance of 100,000 shares of restricted common stock each to 7 directors and to the CFO/Assistant. Secretary, valued at approximately $10,000 each based on the closing bid price as quoted on the OTC on April 17, 2020 of $0.10 per share reflecting the last trade on April 8, 2020.  On April 23, 2020, the Board of Directors authorized a consulting fee to be paid to William R. Cast in the form of 100,000 shares of restricted common stock valued at approximately $10,000 based on the closing bid price as quoted on the OTC on April 22, 2020 of $0.10 per share reflecting the last trade on April 8, 2020. 

The Company has evaluated subsequent events through the date these financial statements were issued and noted no additional events requiring disclosure.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
BASIS OF PRESENTATION
Cash, FDIC insured	$ 147,125	$ 179,147
Cash, FDIC uninsured	$ 500,000	$ 500,000

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	May 04, 2020
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	Mar. 31, 2020
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2020
Entity Common Stock Shares Outstanding		61,882,172
Entity Interactive Data Current	Yes

XML

CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($)	Total	Preferred Stock	Common Stock	Treasury Stock	Additional Paid-In Capital	Accumulated Deficit
Balance, shares at Dec. 31, 2018			59,079,759	(497,587)
Balance, amount at Dec. 31, 2018	$ 752,602		$ 591	$ (49,759)	$ 6,293,761	$ (5,491,991)
Net loss for the three months ended March 31, 2019	(22,976)					(22,976)
Balance, shares at Mar. 31, 2019			59,079,759	(497,587)
Balance, amount at Mar. 31, 2019	729,626		$ 591	$ (49,759)	6,293,761	(5,514,967)
Balance, shares at Dec. 31, 2019			61,479,759	(497,587)
Balance, amount at Dec. 31, 2019	669,228		$ 615	$ (49,759)	6,953,031	(6,234,659)
Net loss for the three months ended March 31, 2019	(25,877)					(25,877)
Balance, shares at Mar. 31, 2020			61,479,759	(497,587)
Balance, amount at Mar. 31, 2020	$ 643,351		$ 615	$ (49,759)	$ 6,953,031	$ (6,260,536)

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2020

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 March 31, 2020, and December 31, 2019, the Company had cash in insured accounts in the amount of $147,125 and $179,147, respectively, and cash equivalents (Treasury and government securities) held in financial institutions that were uninsured by Federal Deposit Insurance Corporation in the amount of approximately $500,000 and $500,000 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 March 31, 2020, and December 31, 2019, 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. Effective January 1, 2019, the Company adopted ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.

The Company followed the accounting guidance in ASC 505-50-30-11, until January 1, 2019 which 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.

Upon the adoption of ASU 2018-07, the Company measured the fair value of equity instruments for nonemployee based payment awards on the grant date.

XML

WARRANTS AND PREFERRED STOCKS (Details Narrative) - USD ($)		3 Months Ended	12 Months Ended
	Jul. 09, 2019	Mar. 31, 2020	Dec. 31, 2019
Preferred stock, shares authorized		4,000,000	4,000,000
Warrant (Member)
Average remaining contractual life		1 year 5 months 9 days	1 year 8 months 5 days
Expiry date		Sep. 07, 2021
Warrant (Member) | 2019 Extension of Warrant Terms [Member]
Expiry date	Sep. 07, 2021
Warrants modification expense	$ 567,194
Number of warrants/options outstanding, beginning	6,909,000
Per share price	$ 0.15
Series A 10% Convertible Preferred Stock [Member]
Preferred stock, shares authorized			4,000,000

XML

FAIR VALUE MEASUREMENTS (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Fair Value [Member]
Assets at fair value on recurring basis	$ 647,125	$ 679,147
Fair Value [Member] | Money market funds [Member]
Assets at fair value on recurring basis	147,125	179,147
Fair Value [Member] | Treasury and government securities [Member]
Assets at fair value on recurring basis	500,000	500,000
Fair Value, Inputs, Level 1 [Member]
Assets at fair value on recurring basis	647,125	679,147
Fair Value, Inputs, Level 1 [Member] | Money market funds [Member]
Assets at fair value on recurring basis	147,125	179,147
Fair Value, Inputs, Level 1 [Member] | Treasury and government securities [Member]
Assets at fair value on recurring basis	500,000	500,000
Fair Value, Inputs, Level 2 [Member]
Assets at fair value on recurring basis
Fair Value, Inputs, Level 2 [Member] | Money market funds [Member]
Assets at fair value on recurring basis
Fair Value, Inputs, Level 2 [Member] | Treasury and government securities [Member]
Assets at fair value on recurring basis
Fair Value, Inputs, Level 3 [Member]
Assets at fair value on recurring basis
Fair Value, Inputs, Level 3 [Member] | Money market funds [Member]
Assets at fair value on recurring basis
Fair Value, Inputs, Level 3 [Member] | Treasury and government securities [Member]
Assets at fair value on recurring basis
Carrying Value [Member]
Assets at fair value on recurring basis	647,125	679,147
Carrying Value [Member] | Money market funds [Member]
Assets at fair value on recurring basis	147,125	179,147
Carrying Value [Member] | Treasury and government securities [Member]
Assets at fair value on recurring basis	$ 500,000	$ 500,000

XML

BASIC AND DILUTED NET LOSS PER COMMON SHARE (Details Narrative) - shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
BASIC AND DILUTED NET LOSS PER COMMON SHARE
Common stock equivalents (preferred stock and warrants)	6,909,000	6,909,000

XML

WARRANTS AND PREFERRED STOCKS

3 Months Ended

Mar. 31, 2020

WARRANTS AND PREFERRED STOCKS

NOTE 5 - WARRANTS AND PREFERRED STOCKS:

Warrants

2019 Extension of Warrant Terms

On July 9, 2019, 6,909,000 common share purchase warrants issued by the Company were modified to extend their maturity date to September 7, 2021. The exercise price and all other terms of the original warrant agreement remain the same. The warrants modification expense of $567,194 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	1.58	%
Average expected life-years	2
Expected volatility	172.88	%
Expected dividends	0	%

	Number of Warrants		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
Outstanding at December 31, 2019		6,909,000	$	0.15		1.69
Granted		-		-		-
Extended
Exercised		-		-		-
Forfeited/expired		-		-		-
Outstanding at March 31, 2020		6,909,000	$	0.15		1.44
Exercisable at March  31, 2020		6,909,000	$	0.15		1.44

As of March 31, 2020 and December 31, 2019, the average remaining contractual life of the outstanding warrants was 1.44 years and 1.68 year, respectively. The warrants will expire on September 7, 2021.

Series A 10% Convertible Preferred Stock

The Company has authorized 4,000,000 shares of Series A 10% Convertible Preferred Stock.  As of December 31, 2019, there was no preferred stock outstanding.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2020

BASIS OF PRESENTATION

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 March 31, 2020, and December 31, 2019, the Company had cash in insured accounts in the amount of $147,125 and $179,147, respectively, and cash equivalents (Treasury and government securities) held in financial institutions that were uninsured by Federal Deposit Insurance Corporation in the amount of approximately $500,000 and $500,000 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 March 31, 2020, and December 31, 2019, 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. Effective January 1, 2019, the Company adopted ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.

The Company followed the accounting guidance in ASC 505-50-30-11, until January 1, 2019 which 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.

Upon the adoption of ASU 2018-07, the Company measured the fair value of equity instruments for nonemployee based payment awards on the grant date.

XML

NEW ACCOUNTING PRONOUNCEMENTS

3 Months Ended

Mar. 31, 2020

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 Company’s financial position, results of operations or cash flows.

Compensation – Stock Compensation — In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 allows companies to account for nonemployee awards in the same manner as employee awards. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those annual periods. The Company adopted this ASU on January 1, 2019. The adoption of ASU 2018-07 did not have a material impact on the Company’s 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 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 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

CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
NET SALES
EXPENSES:
General and administrative expense	26,834	25,106
LOSS FROM OPERATIONS	(26,834)	(25,106)
OTHER INCOME (EXPENSE)
Interest income	957	2,130
TOTAL OTHER INCOME (EXPENSE)	957	2,130
LOSS BEFORE INCOME TAXES	(25,877)	(22,976)
Provision for income taxes
NET LOSS	$ (25,877)	$ (22,976)
LOSS PER COMMON SHARE - BASIC AND DILUTED	$ (0.00)	$ (0.00)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED	60,982,172	58,582,172

XML

WARRANTS AND PREFERRED STOCKS (Details 1)	3 Months Ended
	Mar. 31, 2020 USD ($) $ / shares shares
Number of Warrants
Number of warrants/options outstanding, Beginning | $	$ 6,909,000
Granted | shares
Extended | shares
Exercised | shares
Forfeited/expired | shares
Number of warrants/options outstanding, Ending | $	$ 6,909,000
Exercisable | shares	6,909,000
Weighted Average Exercise Price
Weighted average exercise price outstanding, Beginning	$ 0.15
Granted
Extended
Exercised
Forfeited/expired
Weighted average exercise price outstanding, Ending	0.15
Weighted average exercise price outstanding, Exercisable	$ 0.15
Weighted Average Remaining Contractual Life (Years)
Weighted average remaining contractual life outstanding, beginning	1 year 8 months 9 days
Granted
Extended
Exercised
Forfeited/expired
Weighted average remaining contractual life outstanding, Ending	1 year 5 months 9 days
Weighted average remaining contractual life outstanding, Exercisable	1 year 5 months 9 days

XML

SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - Directors And CFO [Member] - Restricted Stock [Member]	Apr. 23, 2020 USD ($) $ / shares shares	Apr. 20, 2020 USD ($) integer $ / shares shares
Restricted common stock shares issued, shares | shares	100,000	100,000
Number of directors | integer		7
Restricted common stock shares issued, value | $	$ 10,000	$ 10,000
Closing bid price | $ / shares	$ 0.10	$ 0.10

XML

COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

NOTE 7 - 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 cash compensation other than reimbursement of out-of-pocket expenses incurred in connection with Company business and development. 

XML

FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2020

FAIR VALUE MEASUREMENTS

Schedule of assets and liabilities measured at fair value on a recurring basis

	Carrying Amount In Balance Sheet March 31,		Fair Value March 31,		Fair Value Measurement Using
	2020		2020		Level 1		Level 2		Level 3
Assets:
Treasury and government securities	$	500,000	$	500,000	$	500,000
Money market funds		147,125		147,125		147,125
Total Assets	$	647,125	$	647,125	$	647,125	$	—	$	—

	Carrying Amount In Balance Sheet December 31,		Fair Value December 31,		Fair Value Measurement Using
	2019		2019		Level 1		Level 2		Level 3
Assets:
Treasury and government securities	$	500,000	$	500,000	$	500,000
Money market funds		179,147		179,147		179,147
Total Assets	$	679,147	$	679,147	$	679,147	$	—	$	—

XML

CONDENSED BALANCE SHEETS - USD ($)	Mar. 31, 2020	Dec. 31, 2019
CURRENT ASSETS:
Cash and cash equivalents	$ 647,125	$ 679,147
TOTAL ASSETS	647,125	679,147
CURRENT LIABILITIES:
Accounts payable and accrued expenses	3,774	9,919
TOTAL CURRENT LIABILITIES	3,774	9,919
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; no shares issued and outstanding
Common stock, $0.00001 par value 200,000,000 shares authorized; 61,479,759 shares issued and 60,982,172 outstanding as of March 31, 2020 and December 31, 2019	615	615
Treasury stock, $0.00001 par value 497,587 shares as of March 31, 2020 and December 31, 2019	(49,759)	(49,759)
Additional paid-in capital	6,953,031	6,953,031
Accumulated deficit	(6,260,536)	(6,234,659)
TOTAL STOCKHOLDERS' EQUITY	643,351	669,228
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 647,125	$ 679,147

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CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (25,877)	$ (22,976)
Change in operating assets and liabilities:
Accounts payable and accrued expenses	(6,145)	8,198
Net cash used in operating activities	(32,022)	(14,778)
CASH FLOWS FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
NET DECREASE IN CASH	(32,022)	(14,778)
Cash, beginning of period	679,147	755,871
CASH, END OF PERIOD	647,125	741,093
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for: Interest
Cash paid for: Income taxes

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FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2020

FAIR VALUE MEASUREMENTS

NOTE 6 - 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 three months ended March 31, 2020 and the year ended December 31, 2019.

Except for those assets and liabilities which are required by authoritative accounting guidance to be recorded at fair value in the Company’s balance sheets, the Company has elected not to record any other assets or liabilities at fair value, as permitted by ASC 820. No events occurred during the year ended December 31, 2019 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.

The following tables provide information on those assets measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019, respectively:

	Carrying Amount In Balance Sheet March 31,		Fair Value March 31,		Fair Value Measurement Using
	2020		2020		Level 1		Level 2		Level 3
Assets:
Treasury and government securities	$	500,000	$	500,000	$	500,000
Money market funds		147,125		147,125		147,125
Total Assets	$	647,125	$	647,125	$	647,125	$	—	$	—

	Carrying Amount In Balance Sheet December 31,		Fair Value December 31,		Fair Value Measurement Using
	2019		2019		Level 1		Level 2		Level 3
Assets:
Treasury and government securities	$	500,000	$	500,000	$	500,000
Money market funds		179,147		179,147		179,147
Total Assets	$	679,147	$	679,147	$	679,147	$	—	$	—

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WARRANTS AND PREFERRED STOCKS (Tables)

3 Months Ended

Mar. 31, 2020

WARRANTS AND PREFERRED STOCKS (Tables)

Summary of assumptions used in Black Scholes option-pricing model

Average risk-free interest rate	1.58	%
Average expected life-years	2
Expected volatility	172.88	%
Expected dividends	0	%

Schedule of Share-based Compensation, Warrant Options

	Number of Warrants		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
Outstanding at December 31, 2019		6,909,000	$	0.15		1.69
Granted		-		-		-
Extended
Exercised		-		-		-
Forfeited/expired		-		-		-
Outstanding at March 31, 2020		6,909,000	$	0.15		1.44
Exercisable at March  31, 2020		6,909,000	$	0.15		1.44

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CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2020	Dec. 31, 2019
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	$ 0.00001	$ 0.00001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	61,479,759	60,982,172
Common stock, shares outstanding	61,479,759	60,982,172
Treasury stock, shares par value	$ 0.00001	$ 0.00001
Trasury Stock, shares issued	497,587	497,587
10% Series A Convertible Preferred Stock [Member]
STOCKHOLDERS' EQUITY
Preferred stock, shares authorized	50,000	50,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

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BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2020

BASIS OF PRESENTATION

NOTE 1 - BASIS OF PRESENTATION

Chase Packaging Corporation (“the Company”), a Delaware 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, 2019, 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 March 31, 2020, results of operations for the three months ended March 31, 2020 and 2019, and cash flows for the three months ended March 31, 2020 and 2019, as applicable, have been made. The results of operations for the three months ended March 31, 2020 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, 2019, 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.

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WARRANTS AND PREFERRED STOCKS (Details)	3 Months Ended
	Mar. 31, 2020
WARRANTS AND PREFERRED STOCKS (Tables)
Average risk-free interest rate	1.58%
Average expected life- years	2 years
Expected volatility	172.88%
Expected dividends	0.00%

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COMMITMENTS AND CONTINGENCIES (Details Narrative)	3 Months Ended
	Mar. 31, 2020 USD ($)
Chief Financial Officer [Member]
Annual salary	$ 17,000