10QSB

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

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

For the quarterly period ended December 31, 2003

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from                      to                     

Commission File Number 2-5916

CHASE GENERAL CORPORATION

(Exact name of small business issuer as specified in its charter)

Missouri	36-2667734
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

3600 Leonard Road, St. Joseph, Missouri 64503

(Address of principal executive offices)

(816) 279-1625

(Issuer’s telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 ¨

As of January 31, 2004, there were 969,834 shares of common stock, $1 par value, issued and outstanding.

Transitional Small Business Disclosure Format (Check one):

Yes ¨; No x

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CHASE GENERAL CORPORATION

Index

PART I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets at December 31, 2003 (Unaudited) and June 30, 2003	3
Condensed Consolidated Statements of Operations - For the Three Months Ended December 31, 2003 and 2002 (Unaudited)	5
Condensed Consolidated Statements of Operations - For the Six Months Ended December 31, 2003 and 2002 (Unaudited)	6
Condensed Consolidated Statements of Cash Flows - For the Six Months Ended December 31, 2003 and 2002 (Unaudited)	7
Notes to Condensed Consolidated Financial Statements (Unaudited)	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3. Controls and Procedures	15
PART II - OTHER INFORMATION
Item 1. Legal proceedings - None
Item 2. Changes In Securities and Use of Proceeds - None
Item 3. Defaults Upon Senior Securities	16
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K	16
Signatures	16

Exhibit 31  -	Certification of Chief Executive Officer and Treasurer Pursuant to Section 302 of the Sarbanes Oxley Act of 2002	17
Exhibit 32 -	Certification Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	19

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CHASE GENERAL CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS

	December 31, 2003		June 30, 2003
	(Unaudited)
CURRENT ASSETS
Cash and cash equivalents	$	342,878	$	138,806
Trade receivables, net		114,218		146,691
Inventories:
Finished goods		12,962		50,934
Goods in process		6,232		4,337
Raw materials		60,627		46,504
Packaging materials		120,134		100,720
Prepaid expenses		1,967		17,801
Total current assets		659,018		505,793
PROPERTY AND EQUIPMENT - NET		136,825		139,790
TOTAL ASSETS	$	795,843	$	645,583

The accompanying notes are an integral part of these

condensed consolidated financial statements.

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CHASE GENERAL CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS’ EQUITY

	December 31, 2003			June 30, 2003
	(Unaudited)
CURRENT LIABILITIES
Accounts payable	$	49,784		$	48,717
Accrued expenses		59,599			31,183
Total current liabilities		109,383			79,900
LONG-TERM LIABILITIES
Notes payable, Series B		7,032			22,032
Total liabilities		116,415			101,932
STOCKHOLDERS’ EQUITY
Capital stock issued and outstanding:
Prior cumulative preferred stock, $5 par value:
Series A (liquidation preference $1,875,000 and $1,860,000 respectively)		500,000			500,000
Series B (liquidation preference $1,830,000 and $1,815,000 respectively)		500,000			500,000
Cumulative preferred stock, $20 par value
Series A (liquidation preference $4,346,075 and $4,316,809 respectively)		1,170,660			1,170,660
Series B (liquidation preference $708,271 and $703,501 respectively)		190,780			190,780
Common stock, $1 par value		969,834			969,834
Paid-in capital in excess of par		3,134,722			3,134,722
Accumulated deficit		(5,786,568	)		(5,922,345	)
Total stockholders’ equity		679,428			543,651
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	795,843		$	645,583

The accompanying notes are an integral part of these

condensed consolidated financial statements.

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CHASE GENERAL CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended December 31
	2003			2002
NET SALES	$	1,104,450		$	1,022,055
COST OF SALES		729,296			729,485
Gross profit on sales		375,154			292,570
OPERATING EXPENSES
Selling expense		100,773			92,619
General and administrative expenses		57,234			55,830
Total operating expenses		158,007			148,449
Income from operations		217,147			144,121
OTHER INCOME (EXPENSE)		200			589
Net income before income taxes		217,347			144,710
PROVISION FOR INCOME TAXES		62,759			35,534
NET INCOME		154,588			109,176
Preferred dividends		(32,018	)		(32,018	)
Net income applicable to common stockholders	$	122,570		$	77,158
NET INCOME PER SHARE OF COMMON STOCK - BASIC	$	.13		$	.08
NET INCOME PER SHARE OF COMMON STOCK - DILUTED	$	.08		$	.05

The accompanying notes are an integral part of these

condensed consolidated financial statements.

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CHASE GENERAL CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Six Months Ended December 31
	2003			2002
NET SALES	$	1,447,232		$	1,348,429
COST OF SALES		977,887			990,888
Gross profit on sales		469,345			357,541
OPERATING EXPENSES
Selling expense		149,596			136,591
General and administrative expenses		126,390			103,638
Total operating expenses		275,986			240,229
Income from operations		193,359			117,312
OTHER INCOME (EXPENSE)		3,693			(9,335	)
Net income before income taxes		197,052			107,977
PROVISION FOR INCOME TAXES		61,275			28,210
NET INCOME		135,777			79,767
Preferred dividends		(64,036	)		(64,036	)
Net income applicable to common stockholders	$	71,741		$	15,731
NET INCOME PER SHARE OF COMMON STOCK – BASIC	$	.07		$	.02
NET INCOME PER SHARE OF COMMON STOCK – DILUTED	$	.06		$	.02

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CHASE GENERAL CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended December 31
	2003			2002
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	135,777		$	79,767
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		18,142			17,703
Provision for bad debts		3,210			3,210
Loss on disposition of equipment		—			9,747
Effects of changes in operating assets and liabilities:
Receivables		29,263			(615	)
Inventories		2,540			(30,566	)
Prepaid expense		15,834			23,160
Accounts payable		1,067			(31,621	)
Accrued expenses		28,416			15,752
Net cash provided by operating activities		234,249			86,537
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of equipment		(15,177	)		—
Proceeds from sale of equipment		—			5,804
Net cash provided by (used in) investing activities		(15,177	)		5,804
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on notes payable, Series B		(15,000	)		(28,978	)
NET INCREASE IN CASH AND CASH EQUIVALENTS		204,072			63,363
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		138,806			188,528
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	342,878		$	251,891
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash payments for:
Income taxes	$	1,808		$	—
Interest	$	1,322		$	3,860

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – GENERAL

The condensed consolidated balance sheet of Chase General Corporation (“Chase” or “we”, “us”, or “our”) at June 30, 2003 has been taken from audited consolidated financial statements at that date and condensed. The condensed consolidated financial statements as of and for the three months and six months ended December 31, 2003 and for the three months and six months ended December 31, 2002 are unaudited and reflect all normal and recurring accruals and adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position, operating results and cash flows for the interim periods presented in this quarterly report. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, together with management’s discussion and analysis of financial condition and results of operations, contained in our Annual Report on Form 10-K for the year ended June 30, 2003. The results of operations for the three months and six months ended December 31, 2003 and cash flows for the six months ended December 31, 2003 are not necessarily indicative of the results for the entire fiscal year ending June 30, 2004. Where appropriate, items within the condensed consolidated financial statements have been reclassified from the previous periods’ presentation.

NOTE 2 – NET INCOME PER SHARE

The basic income per share was computed on the weighted average of outstanding common shares as follows:

	Three Months Ended December 31				Six Months Ended December 31
	2003		2002		2003		2002
Net income	$	154,588	$	109,176	$	135,777	$	79,767
Preferred dividend requirements:
6% Prior Cumulative Preferred, $5 par value		15,000		15,000		30,000		30,000
5% Convertible Cumulative Preferred, $20 par value		17,018		17,018		34,036		34,036
Total dividend requirements		32,018		32,018		64,036		64,036
Net income common stockholders	$	122,570	$	77,158	$	71,741	$	15,731
Weighted average of outstanding common shares		969,834		969,834		969,834		969,834
Net income per share – basic	$	.13	$	.08		.07		.02

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CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTE 2 - NET LOSS PER SHARE (CONTINUED)

The diluted earnings per share was computed on the weighted average of outstanding common shares plus potential dilutive common shares as follows:

	Three Months Ended December 31				Six Months Ended December 31
	2003		2002		2003		2002
Net income	$	154,588	$	109,176	$	135,777	$	79,767
Preferred dividend requirements:
6% Series Convertible
Series A		—		—		—		15,000
Series B		—		—		—		15,000
5% Series Convertible
Series A		—		—		29,266		29,266
Series B		—		—		4,770		4,770
Total Dividend Requirements		—		—		34,036		64,036
Net Income Common Stockholders		154,588		109,176		101,741		15,731
Weighted average of outstanding common shares		969,834		969,834		969,834		969,834
Dilutive effect of conversion:
6% Series Convertible
Series A		400,000		400,000		400,000		—
Series B		375,000		375,000		375,000		—
5% Series Convertible
Series A		222,133		222,133		—		—
Series B		36,201		36,201		—		—
Weighted average of diluted outstanding common shares		2,003,168		2,003,168		1,744,834		969,834
Diluted Earnings Per Share	$	0.08	$	0.05	$	0.06	$	0.02

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CHASE GENERAL CORPORATION AND SUBSIDIARY

NOTE 2 - NET LOSS PER SHARE (CONTINUED)

Cumulative Preferred Stock dividends in arrears, at December 31, 2003 and 2002, totaled $6,347,906 and $6,219,834, respectively. Total dividends in arrears, on a per share basis, consist of the following at December 31:

	Six Months Ended December 31
	2003		2002
6% Convertible
Series A	$	14	$	13
Series B		13		13
5% Convertible
Series A		54		53
Series B		54		53

Six percent convertible prior cumulative preferred stock may, upon thirty days prior notice, be redeemed by the Corporation at $5.25 a share plus unpaid accrued dividends to date of redemption. In the event of voluntary liquidation, holders of this stock are entitled to receive $5.25 per share plus accrued dividends. It may be exchanged for common stock at the option of the shareholders in the ratio of 4 common shares for one share of Series A and 3.75 common shares for one share of Series B.

The Company has the privilege of redemption of 5% convertible cumulative preferred stock at $21.00 a share plus unpaid accrued dividends. In the event of voluntary or involuntary liquidation, holders of this stock are entitled to receive $20.00 a share plus unpaid accrued dividends. It may be exchanged for common stock at the option of the shareholders, in the ratio of 3.795 common shares for one of preferred.

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CHASE GENERAL CORPORATION AND SUBSIDIARY

ITEM 2. - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations section and other parts of this Report contain forward-looking statements that involve risks and uncertainties. The Company’s actual results and the timing of certain events may differ significantly from the results and timing discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed or referred to in this report and in Item 7 of the Annual Report on Form 10-K for the year ended June 30, 2003.

The following discussion is intended to provide a better understanding of the significant changes in trends relating to Chase’s financial condition and results of operations. Management’s Discussion and Analysis should be read in conjunction with the accompanying condensed consolidated financial statements and notes thereto.

OVERVIEW

Chase General is a holding company for its wholly-owned subsidiary, Dye Candy Company. This subsidiary is the main operating Company that is engaged in the manufacture of confectionery products which are sold primarily to wholesale houses, grocery accounts, vendors, and repackers. The subsidiary (Company) operates two divisions, Chase Candy Company and Poe Candy Company, which share a common labor force and utilize the same basic equipment and raw materials. Therefore, segment reporting for the two divisions is not maintained by Management.

RESULTS OF OPERATIONS

The following table sets forth certain items as a percentage of net sales and revenues for the periods presented:

	Three Months Ended December 31				Six Months Ended December 31
	2003		2002		2003		2002
Net sales	100	%	100	%	100	%	100	%
Cost of sales	66		71		68		73
Gross profit	34		29		32		27
Operating expenses	14		15		19		18
Net income from operations	20		14		13		9
Net income before income taxes	20		14		13		8
Provision for income taxes	6		3		4		2
Net income	14	%	11	%	9	%	6	%

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CHASE GENERAL CORPORATION AND SUBSIDIARY

ITEM 2.  - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

NET SALES

Net sales increased $82,395 or 8% for the three months ended December 31, 2003 to $1,104,450 compared to $1,022,055 for the three months ended December 31, 2002. Gross sales for Chase Candy Company increased $10,662 to $360,499 for the three months ended December 31, 2003 compared to $349,837 for 2002. Gross sales for Poe Candy Company increased $76,991 to $787,775 for the three months ended December 31, 2003 compared to $710,784 for 2002.

Net sales increased $98,803 or 7% for the six months ended December 31, 2003 to $1,447,232 compared to $1,348,429 for the six months ended December 31, 2002. Gross sales for Chase Candy Company increased $32,862 to $722,231 for the six months ended December 31, 2003 compared to $689,369 for 2002. Gross sales for Poe Candy Company increased $69,782 to $801,796 for the six months ended December 31, 2003 compared to $732,014 for 2002.

The overall increase in net sales for the three month period ended December 31, 2003 is primarily due to this time completes the busy season for the Company, along with expansion of the sales market and its website sales, which continued from the first quarter so that year to date net sales have significant gains.

COST OF SALES

The cost of sales decreased $189 to $729,296 decreasing to 66% of related revenues for the three months ended December 31, 2003, compared to $729,485 or 71% of related revenues for the three months ended December 31, 2002. The cost of sales decreased $13,001 to $977,887 decreasing to 68% of related revenues for the six months ended December 31, 2003, compared to $990,888 or 73% of related revenues for the six months ended December 31, 2002. The decrease is due to improved packaging design, that was instituted in the previous year and lower equipment maintenance costs.

SELLING EXPENSES

Selling expenses for the three months ended December 31, 2003 increased $8,154 to $100,773, and increased to 9% of sales, compared to $92,619 or 9% of sales for the three months ended December 31, 2002. Selling expenses for the six months ended December 31, 2003 increased $13,005 to $149,596, and increased to 10% of sales, compared to $136,591 or 10% of sales for the six months ended December 31, 2002. The increase in selling expenses and increase as a percentage of sales are due to the Company’s increased sales and marketing activity.

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CHASE GENERAL CORPORATION AND SUBSIDIARY

ITEM 2.  - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses for the three months ended December 31, 2003 increased $1,404 to $57,234, and increased to 5% of sales, compared to $55,830 or 6% of sales for the three months ended December 31, 2002. General and administrative expenses for the six months ended December 31, 2003 increased $22,752 to $126,390, and increased to 9% of sales, compared to $103,638 or 8% of sales for the six months ended December 31, 2002. The increase as a percentage of sales is due to increased professional fees and insurance costs.

OTHER INCOME (EXPENSE)

Other income and expense decreased by $389 for the three months ended December 31, 2003 to $200, compared to $589 for the three months ended December 31, 2002. Other income and expense increased by $13,028 for the six months ended December 31, 2003 to $3,693, compared to $(9,335) for the six months ended December 31, 2002. This was due to an increase in miscellaneous income of $13,100 and a decrease in interest expense due to a portion of Notes Payable, Series B being paid off in the prior year.

PROVISION FOR INCOME TAXES

The Company recorded a tax provision for the three months ended December 31, 2003 of $62,759 as compared to $35,534 for the three months ended December 31, 2002. The Company recorded a tax provision for the six months ended December 31, 2003 of $61,275 as compared to $28,210 for the six months ended December 31, 2002. This increase of $33,065 was due to increased profits for the current year to date.

NET INCOME

The Company reported a net income for the quarter ended December 31, 2003 of $154,588, compared to a net profit of $109,176 for the quarter ended December 31, 2002. This increase of $45,412 is explained above.

The Company reported a net income for the six months ended December 31, 2003 of $135,777, compared to a net income of $79,767 for the six months ended September 30, 2002. This increase of $56,010 is explained above.

PREFERRED DIVIDENDS

These amounts reflect additional preferred stock dividends in arrears for the three and six months ended December 31, 2003 and 2002, respectively, on the Company’s Series A and Series B $5 par value preferred stock and its Series A and Series B $20 par value preferred stock.

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CHASE GENERAL CORPORATION AND SUBSIDIARY

ITEM 2.  - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

NET INCOME APPLICABLE TO COMMON STOCKHOLDERS

Net income applicable to common stockholders for the three months ended December 31, 2003 was $122,570 which is an increase of $45,412 as compared to the three months ended December 31, 2002.

Net income applicable to common stockholders for the six months ended December 31, 2003 was $71,741 which is an increase of $56,010 as compared to the six months ended December 31, 2002.

LIQUIDITY AND CAPITAL RESOURCES

To date, the Company has been able to fund its operating cash requirements from operations.

The Company believes it has sufficient resources to finance its current operations for at least the next twelve months through working capital. Cash and cash equivalents increased $204,072 to $342,878 at December 31, 2003 from $138,806 at June 30, 2003. To date, there are no material commitments by the Company for capital expenditures. At December 31, 2003, the Company’s accumulated deficit was $5,786,568, compared to accumulated deficit of $5,922,345 as of June 30, 2003. Working capital as of December 31, 2003 increased 29% to $549,635 from $425,893 as of June 30, 2003.

In order to maintain funds to finance operations and meet debt obligations, it is the intention of management to continue its efforts to expand the present market area and increase sales to its existing customers. Management also intends to continue tight control on all expenditures.

There has been no material impact from inflation and changing prices on net sales or on income from continuing operations for the last six months.

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CHASE GENERAL CORPORATION AND SUBSIDIARY

ITEM 3. - CONTROLS AND PROCEDURES

As of the end of the period covered by this report, the Company conducted an evaluation, under the supervision and with the participation of the principal executive officer and principal financial officer, of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based on this evaluation, the principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. There was no change in the Company’s internal control over financial reporting during the Company’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

a. None

b. The total cumulative preferred stock dividends contingency at December 31, 2003 is $6,347,906.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

a. Exhibits.

31	Certification of Chief Executive Officer and Treasurer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of Chief Executive Officer and Treasurer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

b. Reports on Form 8-K.

No reports on Form 8-K were filed by the Registrant in the quarter ended December 31, 2003.

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 GENERAL CORPORATION

Registrant

Dated: February 11, 2004	By:	/s/    BARRY M. YANTIS
		Barry M. Yantis President, Chief Executive Officer, Treasurer and Chairman of the Board

Dated:                         

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EX-31

Exhibit 31

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND TREASURER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Barry M. Yantis, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Chase General 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 such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. I am the certifying officer responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and we have:

a. Designed such disclosure controls and procedures, caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

c. Disclosed in this report any change in the registrant’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) 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.

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Exhibit 31

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND TREASURER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

5. I am the certifying officer and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and 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.

Dated: February 11, 2004	By:	/s/    BARRY M. YANTIS
		Barry M. Yantis President, Chief Executive Officer, Treasurer and Chairman of the Board

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EX-32

Exhibit 32

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 (18 U.S.C. Section 1350, as adopted), I, Barry M. Yantis, President and Chief Executive Officer of Chase General Corporation, certify,

(1) The Company’s Quarterly Report on Form 10-QSB for the period ended December 31, 2003, to which this certification is attached as Exhibit 32 (the “Periodic Report”), fully complies with the requirement of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Periodic Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Periodic Report and results of operations of the Company for the period covered by the Periodic Report.

/s/    BARRY M. YANTIS        

Barry M. Yantis

President, Chief Executive Officer,

Treasurer and Chairman of the Board

Dated: February 11, 2004

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