Chase General's Q3 Sales Plummet 20%, Net Loss More Than Doubles

TL;DR

**Chase General is a sinking ship; avoid at all costs as sales tank and the 'going concern' warning looms large.**

AI Summary

CHASE GENERAL CORP reported a significant decline in sales and a widening net loss for the three months ended September 30, 2025. Total sales decreased by 20.01% to $791,137 from $989,021 in the prior year period. This was primarily driven by a 35.2% drop in Seasonal Candy sales, from $669,941 to $434,270, despite a 11.84% increase in Chase Candy sales to $356,867. The net loss more than doubled, increasing by 129.37% to $40,399 from $17,613 in the same quarter last year. The company's accumulated deficit grew to $5,808,581 as of September 30, 2025, from $5,768,182 at June 30, 2025. Management disclosed the loss of two major customers, anticipating a total sales loss of approximately $575,000, or 17%. Current liabilities surged to $827,076 from $332,802, largely due to a substantial increase in current maturities of notes payable to $384,951 from $124,388, and accounts payable to $286,616 from $91,169. The company also faces substantial doubt about its ability to continue as a going concern, with cash and cash equivalents of only $61,868.

Why It Matters

This filing reveals a company in distress, facing significant operational and financial challenges that directly impact investors, employees, and potentially the broader confectionery market. The loss of two major customers, representing a 17% sales hit, signals a severe competitive disadvantage and raises questions about product demand and market positioning. For investors, the 'going concern' warning and ballooning accumulated deficit of $5.8 million are red flags, indicating high risk and potential for further value erosion. Employees face job insecurity as the company struggles with profitability and customer retention. The competitive landscape for confectionery is intense, and Chase General's struggles could lead to market share shifts if they fail to execute their turnaround plan.

Risk Assessment

Risk Level: high — The company explicitly states 'substantial doubt about the Company's ability to continue as a going concern' due to significant operating losses since inception and an accumulated deficit of $5,808,581 as of September 30, 2025. Furthermore, the loss of two major customers is expected to result in a $575,000 or 17% reduction in sales, directly impacting future revenue and profitability.

Analyst Insight

Investors should divest any holdings in CHASE GENERAL CORP immediately. The 'going concern' warning, coupled with declining sales, increasing losses, and significant customer attrition, indicates severe financial instability and a high probability of further capital loss. Do not consider this stock for investment until a clear, successful turnaround strategy with tangible positive results is demonstrated over several quarters.

Financial Highlights

debt To Equity

1.90

revenue

$791,137

operating Margin

N/A

total Assets

$1,906,375

total Debt

$1,248,960

net Income

-$40,399

eps

-$0.07

gross Margin

N/A

cash Position

$61,868

revenue Growth

-20.01%

Revenue Breakdown

Key Numbers

• $791,137 — Total Sales (Decreased 20.01% from $989,021 in Q3 2024)
• $40,399 — Net Loss (Increased 129.37% from $17,613 in Q3 2024)
• $5,808,581 — Accumulated Deficit (Increased from $5,768,182 at June 30, 2025)
• $575,000 — Expected Sales Loss (Due to loss of two major customers, representing 17% of sales)
• $61,868 — Cash and Cash Equivalents (As of September 30, 2025, indicating liquidity concerns)
• $384,951 — Current Maturities of Notes Payable (Increased from $124,388 at June 30, 2025, indicating short-term debt pressure)
• $286,616 — Accounts Payable (Increased from $91,169 at June 30, 2025)
• 969,834 — Common Stock Shares Outstanding (As of November 6, 2025)
• $0.07 — Basic and Diluted Loss per Share (Increased from $0.05 in Q3 2024)
• 20.01% — Sales Decrease Percentage (Year-over-year decline in total sales for Q3)

Key Players & Entities

• CHASE GENERAL CORP (company) — registrant
• Nodaway Valley Bank (company) — lender for line-of-credit and notes payable
• Ford Motor Credit Company (company) — lender for vehicle financing
• $791,137 (dollar_amount) — total sales for Q3 2025
• $989,021 (dollar_amount) — total sales for Q3 2024
• $40,399 (dollar_amount) — net loss for Q3 2025
• $17,613 (dollar_amount) — net loss for Q3 2024
• $5,808,581 (dollar_amount) — accumulated deficit as of September 30, 2025
• $575,000 (dollar_amount) — expected loss of sales from two major customers
• September 30, 2025 (date) — end of current reporting period

FAQ

Risk Factors

• Going Concern Uncertainty [high — financial]: The company faces substantial doubt about its ability to continue as a going concern due to significant operating losses, an accumulated deficit of $5,808,581 as of September 30, 2025, and a low cash position of $61,868. Management's plans to mitigate this include expanding market areas, increasing sales, controlling expenditures, and managing inventory.
• Customer Concentration Risk [high — financial]: The loss of two major customers is expected to result in a total sales loss of approximately $575,000, representing 17% of sales. This loss will negatively impact the company's financial condition and operating results.
• Surging Current Liabilities [high — financial]: Total current liabilities increased to $827,076 from $332,802, driven by a substantial rise in current maturities of notes payable to $384,951 (from $124,388) and accounts payable to $286,616 (from $91,169). This indicates significant short-term debt pressure.
• Volatile Raw Material Prices [medium — market]: Management anticipates continued fluctuations in raw material prices due to supply and demand, which could impact profitability. The company plans to make sales price adjustments to correspond with these changes.
• Dependence on Shared Resources [medium — operational]: Both Chase Candy Products and Seasonal Candy Products divisions share common labor, equipment, and raw materials. Any disruption in these shared resources could impact both segments.

Industry Context

The confectionery industry is characterized by seasonal demand and competition based on product innovation and pricing. Companies often manage fluctuating raw material costs through strategic sourcing and price adjustments. The market can be sensitive to consumer spending and economic conditions.

Regulatory Implications

While no specific regulatory issues are detailed, companies in the food and beverage sector are subject to food safety regulations, labeling requirements, and fair trade practices. Non-compliance can lead to fines, product recalls, and reputational damage.

What Investors Should Do

1. Monitor customer retention and new customer acquisition efforts.
2. Assess the company's liquidity and debt management strategies.
3. Evaluate the effectiveness of management's turnaround plan.

Key Dates

• 2025-09-30: End of Q3 2025 — Reported total sales of $791,137, a 20.01% decrease year-over-year. Net loss widened to $40,399. Current liabilities surged to $827,076.
• 2025-06-30: End of Q2 2025 — Accumulated deficit was $5,768,182. Current liabilities were $332,802.
• 2024-09-30: End of Q3 2024 — Reported total sales of $989,021. Net loss was $17,613. Basic and diluted loss per share was $0.05.

Glossary

Accumulated Deficit

The cumulative net losses of a company that have not been offset by net income. It represents the total losses incurred since the company's inception. (Indicates the company's long-term unprofitability, with the deficit growing to $5,808,581.)

Going Concern

An accounting assumption that a business will continue to operate for the foreseeable future, typically at least 12 months. If there is substantial doubt about this, it must be disclosed. (The company faces substantial doubt about its ability to continue as a going concern, highlighting severe financial distress.)

Current Liabilities

Obligations that are expected to be settled within one year or the operating cycle, whichever is longer. (A significant increase in current liabilities to $827,076 signals immediate financial pressure and potential liquidity issues.)

Current Maturities of Notes Payable

The portion of long-term debt that is due within the next year. (The sharp increase to $384,951 indicates a growing short-term debt burden that needs to be addressed.)

Basic and Diluted Loss per Share

The amount of net loss attributable to each outstanding share of common stock, considering both basic and potentially dilutive shares. (The loss per share increased to $0.07, reflecting a worsening profitability on a per-share basis.)

Year-Over-Year Comparison

Compared to the prior year's third quarter, Chase General Corp. has experienced a significant downturn. Total sales have fallen by 20.01% to $791,137, primarily due to a 35.2% decline in Seasonal Candy sales. The net loss has more than doubled, increasing by 129.37% to $40,399, and the basic and diluted loss per share has risen from $0.05 to $0.07. A major concern is the substantial increase in current liabilities, which have more than doubled, indicating heightened short-term financial pressure.

Key Financial Figures

• $1.00 — re were 969,834 shares of common stock, $1.00 par value, outstanding. Table of Conte

Filing Documents

• csgn-20250930x10q.htm (10-Q) — 820KB
• csgn-20250930xex31d1.htm (EX-31.1) — 15KB
• csgn-20250930xex32d1.htm (EX-32.1) — 8KB
• 0001104659-25-107509.txt ( ) — 3637KB
• csgn-20250930.xsd (EX-101.SCH) — 27KB
• csgn-20250930_cal.xml (EX-101.CAL) — 44KB
• csgn-20250930_def.xml (EX-101.DEF) — 103KB
• csgn-20250930_lab.xml (EX-101.LAB) — 201KB
• csgn-20250930_pre.xml (EX-101.PRE) — 186KB
• csgn-20250930x10q_htm.xml (XML) — 489KB

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 13 ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 18 ITEM 4.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 18 PART II OTHER INFORMATION ITEM 1.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 19 ITEM 1A.

RISK FACTORS

RISK FACTORS 19 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 19 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 19 ITEM 4. MINE SAFETY DISCLOSURES 19 ITEM 5. OTHER INFORMATION 19 ITEM 6. EXHIBITS 20

SIGNATURES

SIGNATURES 21 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS CHASE GENERAL CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) September 30, June 30, 2025 2025 ASSETS CURRENT ASSETS Cash and Cash Equivalents $ 61,868 $ 47,440 Trade Receivables, Net of Allowance for Credit Losses of $ 1,896 613,877 212,015 Inventories: Finished Goods 167,095 180,089 Goods in Process 18,952 13,445 Raw Materials 119,427 128,763 Packaging Materials 219,939 159,857 Prepaid Expenses 4,767 6,640 Total Current Assets 1,205,925 748,249 LONG-TERM ASSETS Property & Equipment Land 35,000 35,000 Buildings 77,348 77,348 Machinery and Equipment 1,032,381 1,032,381 Trucks and Autos 184,200 184,200 Office Equipment 33,025 33,025 Leasehold Improvements 72,068 72,068 Total 1,434,022 1,434,022 Less: Accumulated Depreciation and Amortization ( 1,126,894 ) ( 1,110,377 ) Total Property and Equipment, Net 307,128 323,645 Right-of-Use Asset 393,322 411,473 Total Long-Term Assets 700,450 735,118 Total Assets $ 1,906,375 $ 1,483,367 The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. (1) Table of Contents CHASE GENERAL CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) (UNAUDITED) September 30, June 30, 2025 2025 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts Payable $ 286,616 $ 91,169 Current Maturities of Notes Payable 384,951 124,388 Current Maturities of Lease Liability 75,976 74,615 Accrued Expenses 52,648 26,342 Refund Liability Owed to Customers 26,885 16,288 Total Current Liabilities 827,076 332,802 LONG-TERM LIABILITIES Notes Payable, Less Current Maturities 104,538 115,893 Lease Liability, Less Current Maturities 317,346 336,858 Total Long-Term Liabilities 421,884 452,751 Total Liabilities 1,248

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) Prior Cumulative Cumulative Preferred Stock Preferred Stock Common Paid-In Accumulated Series A Series B Series A Series B Stock Capital Deficit Total BALANCE, June 30, 2024 $ 500,000 $ 500,000 $ 1,170,660 $ 190,780 $ 969,834 $ 3,134,722 $ ( 5,661,645 ) $ 804,351 Net loss, three months ended September 30, 2024 — — — — — — ( 17,613 ) ( 17,613 ) BALANCE, September 30, 2024 $ 500,000 $ 500,000 $ 1,170,660 $ 190,780 $ 969,834 $ 3,134,722 $ ( 5,679,258 ) $ 786,738 Prior Cumulative Cumulative Preferred Stock Preferred Stock Common Paid-In Accumulated Series A Series B Series A Series B Stock Capital Deficit Total BALANCE, June 30, 2025 $ 500,000 $ 500,000 $ 1,170,660 $ 190,780 $ 969,834 $ 3,134,722 $ ( 5,768,182 ) $ 697,814 Net loss, three months ended September 30, 2025 — — — — — — ( 40,399 ) ( 40,399 ) BALANCE, September 30, 2025 $ 500,000 $ 500,000 $ 1,170,660 $ 190,780 $ 969,834 $ 3,134,722 $ ( 5,808,581 ) $ 657,415 The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. (4) Table of Contents CHASE GENERAL CORPORATION AND SUBSIDIARY

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW S (UNAUDITED) Three Months Ended September 30, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES Net Loss $ ( 40,399 ) $ ( 17,613 ) Adjustments to Reconcile Net Loss to Net Cash Provided by/(Used in) Operating Activities: Depreciation and Amortization 16,517 11,682 Deferred Income Amortization — ( 324 ) Deferred income taxes — ( 5,610 ) Effects of Changes in Operating Assets and Liabilities: Trade Receivables ( 401,862 ) ( 566,153 ) Inventories ( 43,259 ) 81,635 Prepaid Expenses 1,873 1,904 Accounts Payable 195,447 120,719 Refund Liability Owed to Customers 10,597 17,967 Accrued Expenses 26,306 33,444 Net Cash Used in Operating Activities ( 234,780 ) ( 322,349 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from Line-of-Credit 260,000 330,000 Principal Payments on Notes Payable ( 10,792 ) ( 5,314 ) Net Cash Provided by Financing Activities 249,208 324,686 INCREASE IN CASH AND CASH EQUIVALENTS 14,428 2,337 Cash and Cash Equivalents - Beginning of Period 47,440 41,974 CASH AND CASH EQUIVALENTS - END OF PERIOD $ 61,868 $ 44,311 The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. (5) Table of Contents CHASE GENERAL CORPORATION AND SUBSIDIARY

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Condensed Consolidated financial statements

Item 1. Condensed Consolidated financial statements notes to condensed consolidated financial statements (unaudited) NOTE 1 SIGNIFICANT ACCOUNTING POLICIES General The condensed consolidated balance sheet of Chase General Corporation (hereinafter referred to as Chase, the Company, we, our, and us) at June 30, 2025, 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 ended September 30, 2025 and for the three months ended September 30, 2024 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, 2025. The results of operations for the three months ended September 30, 2025, and cash flows for the three months ended September 30, 2025, are not necessarily indicative of the results for the entire fiscal year ending June 30, 2026. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to fairly present the financial position, results of operations, and cash flows for the periods have been included. Revenue Recognition The majority of our revenue is derived by fulfilling customer orders for the purchase of our product. The Company recognizes revenue at the point in time that control of the ordered product(s) is transferred to the customer, which is typically upon shipment to the customer. Amounts billed and due from our customers are classified as trade receivables on th

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Condensed Consolidated financial statements

Item 1. Condensed Consolidated financial statements notes to condensed consolidated financial statements (unaudited) NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (cont.) Revenue Recognition (cont.) The majority of the Company's products are confectionery and confectionery-based and, therefore, exhibit similar economic characteristics, such that they are based on similar ingredients and are marketed and sold through the same channels to the same customers. The Company operates two divisions, Chase Candy Products and Seasonal Candy Products. Both divisions share a common labor force and utilize the same basic equipment and raw materials. Management considers these two divisions as one reportable segment. The various divisions of revenue are as follows: For the three months ended September 30, 2025 2024 SALES Chase Candy $ 356,867 $ 319,080 Seasonal Candy 434,270 669,941 Total $ 791,137 $ 989,021 Subsequent Events No events have occurred subsequent to September 30, 2025, through the date of filing this form, that would require disclosure in this Form 10-Q or would be required to be recognized in the condensed consolidated financial statements as of or for the three month period ended September 30, 2025. NOTE 2 GOING CONCERN AND MANAGEMENT'S PLAN The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve months following the date these consolidated financial statements are available. The Company has incurred significant operating losses since its inception. At September 30, 2025, the Company has an accumulated deficit of $ 5,808,581 and cash and cash equivalents of $ 61,868 . During fiscal year 2026, the Company lost two major customers. Based on historical sales to these customers, management expects a total loss of sales of approximately $

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Condensed Consolidated financial statements

Item 1. Condensed Consolidated financial statements notes to condensed consolidated financial statements (unaudited) NOTE 2 GOING CONCERN AND MANAGEMENT'S PLAN (cont.) Management believes that the successful execution of its business plan and debt refinancing would alleviate the substantial doubt about the Company's ability to continue as a going concern. However, there can be no assurance that these plans will be successful. Because it is unclear whether the Company will be successful in accomplishing these objectives, there is uncertainty about the Company's circumstances, which creates substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. NOTE 3 LOSS PER SHARE The loss per share was computed on the weighted average of outstanding common shares during the period. Diluted loss per share is calculated by including contingently issuable shares with the weighted average shares outstanding. Three Months Ended September 30, 2025 2024 Net Loss $ ( 40,399 ) $ ( 17,613 ) Preferred Dividend Requirements: 6 % Prior Cumulative Preferred, $ 5 Par Value 15,000 15,000 5 % Convertible Cumulative Preferred, $ 20 Par Value 17,018 17,018 Total Dividend Requirements 32,018 32,018 Net Loss attributable to Common Stockholders $ ( 72,417 ) $ ( 49,631 ) Weighted Average Shares - Basic 969,834 969,834 Effect of Contingently Issuable Shares, if Dilutive 1,033,334 1,033,334 Weighted Average Shares - Diluted 2,003,168 2,003,168 Basic and Diluted Loss per Share $ ( 0.07 ) $ ( 0.05 ) (8) Table of Contents CHASE GENERAL CORPORATION AND SUBSIDIARY

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Condensed Consolidated financial statements

Item 1. Condensed Consolidated financial statements notes to condensed consolidated financial statements (unaudited) NOTE 3 LOSS PER SHARE (cont.) The Company excludes equity instruments from the calculation of diluted earnings per share if the effect of including such instruments is anti-dilutive. All of the preferred stock, which is convertible into 1,033,334 shares of common stock was excluded for the three months ended September 30, 2025 and 2024, respectively, as its conversion would have an anti-dilutive effect. Cumulative Preferred Stock dividends in arrears at September 30, 2025 and 2024, totaled $ 9,133,472 and $ 9,005,400 , respectively. Total dividends in arrears, on a per share basis, consist of the following: Three Months Ended September 30, 2025 2024 6 % Convertible: Series A $ 20 $ 20 Series B $ 20 $ 19 5 % Convertible: Series A $ 76 $ 75 Series B $ 76 $ 75 The 6 % convertible prior cumulative preferred stock may, upon thirty days prior notice, be redeemed by the Corporation at $ 5.25 per 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 four 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 per share plus unpaid accrued dividends. In the event of voluntary or involuntary liquidation, holders of this stock are entitled to receive $ 20 per 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. (9) Table of Contents CHASE GENERAL CORPORATION AND SUBSIDIARY

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Condensed Consolidated financial statements

Item 1. Condensed Consolidated financial statements notes to condensed consolidated financial statements (unaudited) NOTE 4 NOTES PAYABLE The Company's notes payable consists of: September 30, June 30, Payee Terms 2025 2025 Nodaway Valley Bank $ 500,000 line-of-credit agreement expiring on January 2, 2026, with a variable interest rate at prime but not less than 5 % ( 7.25 % at September 30, 2025). The line of credit is collateralized by substantially all assets of the Company. $ 340,000 $ 80,000 Nodaway Valley Bank $ 885 monthly payments, interest of 7.25 %; final payment due April 2027, secured by a vehicle. 15,826 18,159 Ford Motor Credit Company $ 1,126 monthly payments, interest of 2.9 %; final payment due November 2026, secured by a vehicle. 15,469 18,718 Nodaway Valley Bank $ 2,514 monthly payments, interest of 7.5 %; final payment due May 2030, secured by equipment. 118,194 123,404 Total 489,489 240,281 Less Current Portion 384,951 124,388 Long-Term Portion $ 104,538 $ 115,893 Future minimum payments for the twelve months ended September 30 are: September 30, Amount 2026 $ 384,951 2027 31,941 2028 25,512 2029 27,535 2030 19,550 Total $ 489,489 NOTE 5 INCOME TAXES The Company did not record an income tax provision or benefit for the three months ended September 30, 2025 as a full valuation allowance has been recorded against the net deferred tax assets of the Company. The Company recorded an income tax benefit of $ 5,610 for the three months ended September 30, 2024 as additional net operating losses were generated during this period prior to recording a full valuation allowance against the net deferred tax assets of the Company. As of September 30, 2025 and 2024, a valuation allowance of $ 51,584 and $ 0 , respectively, was established. As of September 30, 2025, the Company has net operating loss carryovers of approximately $ 296,000 , none of which expire but are

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Condensed Consolidated financial statements

Item 1. Condensed Consolidated financial statements notes to condensed consolidated financial statements (unaudited) NOTE 5 INCOME TAXES (cont.) The Company follows the provisions for uncertain tax positions as addressed in Financial Accounting Standards Board Accounting Standards Codification 740-10. The Company has no material tax positions for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of such deductibility as of September 30, 2025. The Company had no accruals for interest or penalties at September 30, 2025. The Company's federal income tax returns for the fiscal years ended 2025, 2024, 2023 and 2022 are subject to examination by the Internal Revenue Service taxing authority. NOTE 6 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Three Months Ended September 30, 2025 2024 Supplemental Cash Flow Information: Interest paid $ 2,782 $ 717 NOTE 7 DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS The Company's financial instruments consist principally of cash and cash equivalents, trade receivables and payables, and notes payable. There are no significant differences between the carrying value and fair value of any of these financial instruments. NOTE 8 COMMITMENT, CONTINGENCIES, AND RELATED PARTY TRANSACTIONS The Company leases its office and manufacturing facility, located in St. Joseph, Missouri under an operating lease from an entity that is owned by the son of the Chief Executive Officer of the Company. The original lease term was from February 1, 2005 through March 31, 2025, with an option to extend for an additional term of five years . The required lease payments through this period were $ 6,500 per month. During the period ended June 30, 2023, the Company determined the exercise of the renewal option to be reasonably assured and remeasured the right-of-use asset and lease liability to include the additional five years at what was the current rate so that the new

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Condensed Consolidated financial statements

Item 1. Condensed Consolidated financial statements notes to condensed consolidated financial statements (unaudited) NOTE 8 COMMITMENT, CONTINGENCIES, AND RELATED PARTY TRANSACTIONS (cont.) An operating lease right-of-use asset and liability was recognized based on the present value of minimum lease payments over the remaining lease term. The Company's operating lease has a remaining term of 4.5 years, and the present value of the lease payments is calculated using the Company's estimated incremental borrowing rate of 7.25 % as of the remeasurement date. Operating lease expense is recognized on a straight-line basis over the lease term. The Company's lease agreement does not contain any residual value guarantees. Additionally, any other short-term leases are immaterial. The Company elected the practical expedient to not separate lease and nonlease components and also elected the short-term practical expedient for all leases that qualify. As a result, the Company will not recognize right-of-use assets or liabilities for short-term leases that qualify for the short-term practical expedient but instead will recognize the lease payments as lease cost on a straight-line basis over the lease term. Cash paid for operating lease liabilities and operating lease expense was $ 25,500 for the three months ended September 30, 2025, of which, $ 23,396 is included in cost of sales and $ 2,104 is included in general and administrative expenses. Minimum annual payments required under the existing operating lease liability that have initial or remaining noncancelable terms in excess of one year as of September 30, 2025 are as follows: Twelve Months Ending September 30, Amount 2026 $ 102,000 2027 102,000 2028 102,000 2029 102,000 2030 51,000 Total Lease Payments 459,000 Less: Imputed Interest ( 65,678 ) Total Lease Liabilities $ 393,322 (12) Table of Contents CHASE GENERAL CORPORATION AND SUBSIDIARY

financial INFORMATION

PART I financial INFORMATION

management's discussion and analysis of

item 2. management's discussion and analysis of financial condition and results of operations OVERVIEW Chase General Corporation (Chase) 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 division and Seasonal Candy division, 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. The Company's business, like that of many other confectionary product manufacturers, is seasonal. Historically, the Company has realized more of its revenue and earnings in the second fiscal quarter, which includes the majority of the holiday shopping season, than in any other fiscal quarter. RESULTS OF OPERATIONS - Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024 The following management comments regarding Chase's results of operations and outlook should be read in conjunction with the condensed consolidated financial statements included pursuant to Item 1 of the quarterly report. The following table sets forth certain items as a percentage of sales for the periods presented: Three Months Ended September 30, 2025 2024 Sales 100 % 100 % Cost of Sales 67 % 71 % Gross Profit on Sales 33 % 29 % Operating Expenses 37 % 30 % Loss from Operations (4) % (1) % Other Expenses, Net (1) % (2) % Loss before Income Taxes (5) % (3) % Income Tax Benefit — % 1 % Net Loss (5) % (2) % SALES During fiscal year 2026, the Company lost two major customers. B

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