SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB


(Mark One)

     [X]  Quarterly report under Section 13 or 15(d) of the Securities  Exchange
          Act of 1934 for the quarterly period ended September 30, 2000.

     [ ]  Transition  report  under  Section  13  or  15(d)  of  the  Securities
         Exchange Act of 1934 for the transition period from ______ to ______ .


         Commission file number:  33-2128-D
                                -----------


                              ERLY INDUSTRIES, INC.
                              ---------------------
        (Exact name of small business issuer as specified in its charter)





             California                                95-2312900
             ----------                                ----------
  (State or other jurisdiction of                   (I.R.S. Employer
   incorporation or organization)                  Identification No.)





      8641 United Plaza Blvd., Suite 300, Baton Rouge, LA       70809
      --------------------------------------------------------------------
           (Address of principal executive office)           (Zip Code)


                                 (225) 922-4540
                                 --------------
                           (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
                                       ------                   -----

The number of outstanding shares of the issuer's common stock,  $0.001 par value
(the only class of voting stock), as of October 17, 2000 was 5,762,088.

                                                         1

<PAGE>



                                TABLE OF CONTENTS

                         PART I - FINANCIAL INFORMATION



ITEM 1.  FINANCIAL STATEMENTS..................................................3

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS..................................4


                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.....................................................5

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K......................................5

SIGNATURES.....................................................................6

INDEX TO EXHIBITS..............................................................7












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                                        2

<PAGE>



ITEM 1.           FINANCIAL STATEMENTS

As used herein, the term "Company" refers to Erly Industries, Inc., a California
corporation and predecessors unless otherwise indicated. Unaudited, consolidated
interim financial statements including a balance sheet for the Company as of the
quarter ended September 30, 2000 and statements of operations, and statements of
cash flows for the 3 month and 6 months  interim  periods up to the date of such
balance sheet and the period from inception,  August 21, 1999, through September
30,  2000,  are  attached  hereto as Pages F-1 through F-5 and are  incorporated
herein by this reference.
















                 [THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY.]




                                        3

<PAGE>



                          INDEX TO FINANCIAL STATEMENTS
                                                                            PAGE


Consolidated Balance Sheet...................................................F-2

Statements of Unaudited Consolidated Operations..............................F-3

Statement of Unaudited Consolidated Cash Flows...............................F-4

Notes to Unaudited Financial Statements......................................F-5













                                       F-1

<PAGE>





                                               Erly Industries, Inc.
                                           (A Development Stage Company)
                                  UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
                                                September 30, 2000



                                                                 Unaudited
                                                             September 30, 2000
                                                          ----------------------
    ASSETS

     CURRENT ASSETS
            Cash                                            $           207,742
            Refunds receivable                                            1,963
                                                               ----------------
     Total Current Assets                                               209,705

    TOTAL ASSETS                                            $           209,705
                                                               =================



LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
       Accounts payable                                   $              10,628
       Compensation payable to Officer                                  400,000
                                                            -------------------
Total Current Liabilities                                               410,628

TOTAL LIABILITIES                                                       410,628
                                                            --------------------

SHAREHOLDERS' EQUITY/ (DEFICIT)
       Preferred stock, $100 par value, 6,000
            shares authorized; issued and
            outstanding -0- shares                                             -
       Common stock, $0.01 par value,
            15,000,000 shares authorized,
            issued and outstanding 5,762,088                                   -
       Deficit accumulated during the development stage                (200,923)
                                                            --------------------
       Total Stockholders' Equity (Deficit)                            (200,923)
                                                            --------------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)      $             209,705
                                                            ====================






                       See Notes To Financial Statements.


                                       F-2

<PAGE>


<TABLE>

                                               Erly Industries, Inc.
                                           (A DEVELOPMENT STAGE COMPANY)
                             UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


<CAPTION>

                                                                                                         From inception of
                                                                                                         Development Stage
                                                                                                                on
                                                     For the Three             For the Six                August 21, 1999
                                                      months ended             months ended                   through
                                                     September 30,             September 30                September 30,
                                                          2000                     2000                        2000
                                                   ------------------       ------------------       -------------------------
<S>                                           <C>                        <C>                      <C>
Sales                                           $                   -    $                   -     $                         -
General and Administrative                                      1,672                    7,113                         409,787
                                                   ------------------       ------------------       -------------------------
     Income (Loss) From Operations                             (1,672)                  (7,113)                       (409,787)
                                                   ------------------       ------------------       -------------------------

Other Income (Expense)
Refund of funds previously expended                             3,008                    8,340                         202,722
Interest income                                                 1,829                    4,437                           6,142
                                                   ------------------       ------------------       -------------------------
     Total Other Income (Expense)                               4,837                   12,777                         208,864
                                                   ------------------       ------------------       -------------------------
Net gain (loss)                                                 3,165                    5,664                       (200,923)

Income taxes                                                        -                        -                               -
                                                   ------------------       ------------------       -------------------------
Net Income (Loss)                               $               3,165    $               5,664     $                 (200,923)
                                                   ==================       ==================       =========================


Income (Loss) per share                         $                 .00    $                 .00     $                     (.03)


Weighted average shares outstanding                         5,762,088                5,762,088                       5,762,088
                                                    ==================       ==================       =========================

</TABLE>






                                        See Notes to Financial Statements.






                                                        F-3

<PAGE>


<TABLE>

                                               ERLY INDUSTRIES, INC.
                                           (A DEVELOPMENT STAGE COMPANY)
                             UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<CAPTION>

                                                                                                                 From
                                                                                                             inception of
                                                                                                              Development
                                                                                                               Stage on
                                                         For the Three              For the Six               August 21,
                                                         months ended              months ended              1999 through
                                                         September 30,             September 30,             September 30,
                                                             2000                      2000                      2000
                                                      -------------------       -------------------       -------------------
<S>                                               <C>                         <C>                      <C>
Cash Flows from Operating Activities
  Net Gain (Loss)                                   $               3,165     $               5,664     $           (200,923)
      Adjustments to reconcile to net cash
      provided in operating activities:
           Increase in refunds receivable                          (1,963)                   (1,963)                   (1,963)
           Increase in accounts payable                             5,187                    10,628                    10,628
           Increase in other current liabilities                        -                         -                   400,000
                                                      -------------------       -------------------       -------------------
Net Cash Provided in Operating
Activities                                                          6,389                    14,329                   207,742
                                                      -------------------       -------------------       -------------------
Cash flow from Investing Activities                                     -                         -                         -
                                                      -------------------       -------------------       -------------------
Cash flow from Financing Activities                                     -                         -                         -
                                                      -------------------       -------------------       -------------------
Net Increase (Decrease) in Cash                                     6,389                    14,329                   207,742

Cash at Beginning of Period                                       201,353                   193,413                         -
                                                      -------------------       -------------------       -------------------
Cash at End of Period                               $             207,742     $             207,742     $             207,742
                                                      -------------------       -------------------       -------------------
Supplemental Disclosures
      Interest paid                               $                     -     $                   -     $                   -
      Income taxes paid                                                 -                         -                         -

</TABLE>



                                           See Notes to Financial Statements.











                                                        F-4

<PAGE>



                              ERLY INDUSTRIES, INC.
                          (A Development Stage Company)
       Notes to the Unaudited Condensed Consolidated Financial Statements
                               September 30, 2000

NOTE 1 -          PRELIMINARY NOTE

         The  accompanying  condensed  financial  statements  have been prepared
         without audit,  pursuant to the rules and regulations of the Securities
         and Exchange  Commission.  Certain information and disclosures normally
         included  in the  financial  statements  prepared  in  accordance  with
         generally  accepted  accounting   principles  have  been  condensed  or
         omitted.  These financial  statements reflect all adjustments which, in
         the opinion of management, are necessary to present a fair statement of
         the  results  for the  periods  included.  It is  suggested  that these
         condensed  financial   statements  be  read  in  conjunction  with  the
         financial statements and notes thereto included in the Company's Annual
         Report on Form 10KSB for the period ended March 31, 2000.

 NOTE 2 -         INCOME TAXES

         The  Company  is not able to  determine  its net  operating  loss (NOL)
         carryforwards due to significant tax sharing agreements with its former
         subsidiary,  American Rice,  Inc. Due to the inability of management to
         determine  the  amount  of NOL as well  as the  uncertainty  of  future
         taxable income,  management has established the valuation  allowance to
         be any amount necessary to reduce the tax benefit of any NOL to zero.

         Related to the uncertainty associated with NOLs, the possibility exists
         that the Company could ultimately be liable for income taxes.  Although
         management  believes that the Company should not have taxable income or
         liabilities,  the possibility does exist. These financial statements do
         not provide for any possible income taxes that could ultimately be owed
         by the Company.

NOTE 3 -          COMPARABLE PERIODS

         Normally,  the  presentation  of  financial  statements  for an interim
         period  include  comparable  amounts from the previous  year.  However,
         since the Company  emerged  from  Chapter 11  Bankruptcy  on August 21,
         1999, as a  development  stage  company,  comparable  period  financial
         statements  are not  presented  as they  would  not  represent  a valid
         comparison.

NOTE 4 -          COSOLIDATED ENTITIES

         The   presentation   of   financial   statements   represents   amounts
         consolidated  from the following  subsidiaries  many of which have been
         defunct for some time:

         *    Watch-Edge   International   (WEI,  formerly  known  as  Chemonics
              Industries, Inc)
              * Chemonics International, Inc. 100% owned by WEI
              *  Chemonics  Fire-Trol,  Inc.  100%  owned  by  WEI
              *  Chemonics  Industries  LTD  (Canada)  100%  owned  by WEI
              *  Transcontinental  Distribution  Company LTD (South Africa) 100%
                 owned by WEI
         * The Beverage Source (discontinued FY 1990)
         * Erly Juice, Inc. (discontinued 1993)
         * Worldmark, Inc. 99% owned by ERLY, Inc (discontinued Dec. 1993)
              * Eau   Claire   Packing  Co.,  100%   owned  by  Worldmark,  Inc.
               (discontinued Dec. 1993)

                                       F-5

<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Plan of Operations

As used herein the term "Company" refers to Erly Industries,  Inc., a California
corporation, its consolidated entities, and its predecessors, unless the context
indicates otherwise. The Company emerged from bankruptcy on August 21, 1999. The
Company is currently a shell company whose purpose will be to acquire operations
through an acquisition, merger or begin its own start-up business.

The Company is in the process of  attempting to identify and acquire a favorable
business  opportunity.  On March 22, 2000,  the Board of Directors  accepted the
terms of an agreement to provide a  controlling  interest of ERLY's common stock
to a group of investors at an  undetermined  date  subsequent  to September  30,
2000. As of the date of this filing that  transaction has not been finalized and
therefore  the  parties  involved  are  undisclosed  until  the  transaction  is
consummated  and the  appropriate  Form 8-K is filed.  There can be no assurance
offered that ERLY will be successful  in  developing a viable  business plan and
obtaining  capital  necessary  to carry out a business  plan or to continue as a
going concern.

The Company has no plans for the purchase or sale of any plant or equipment.

The Company is a development  stage company and currently has no employees.  The
Company has no current plans to make any changes in the number of employees.

Results of Operations

The Company had no sales  revenues for the three and six months ended  September
30,  2000.  The  Company  had no sales in for the  three  months  and six  ended
September  30,  2000  because it emerged  from  bankruptcy  on August 21,  1999,
without operations as a development stage company.

The Company had no costs of sales  revenues  for the three months and six months
ended  September 30, 2000 because it emerged from bankruptcy on August 21, 1999,
without operations as a development stage company.

General and administrative expenses were $1,672 three months ended September 30,
2000 and $7,113 for the six months ended  September  30,  2000.  The general and
administrative  expenses were incurred by activities  related to resolving  debt
and searching for an appropriate candidate for a reverse merger.

The Company  recorded net income of $3,165 for the three months ended  September
30, 2000 and net income of $5,664 for the six months ended  September  30, 2000.
The net income  recorded  for the three  months  ended  September  30,  2000 was
attributable  to $1,672 in  general  administrative  expenses,  an tax refund of
overpayment of $1,045, an insurance refund  receivable of $1,963,  and $1,829 in
interest income on assets held in bank accounts.

Capital Resources and Liquidity

At  September  30,  2000,  the Company had current  assets of $209,705 and total
assets of $209,705. The Company had a net working capital deficit of $200,923 at
September 30, 2000.

Net stockholders' deficit in the Company was $200,923 as of September 30, 2000.


                                        6

<PAGE>



The Company's working capital deficit and  stockholder's  deficit are the result
of a $400,000  liability accepted by the Board of Directors as a post-bankruptcy
liability after it was rejected by the bankruptcy  court, and $10,628 in accrued
expenses for stock transfer related  activities.  The Company received a release
of claims for the $400,000  debt on October 4, 2000 for an amount which is still
under negotiation.  The impact of this will be shown on the next quarter's 10QSB
filing.


                            PART II-OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

On August 9, 1999,  the Bankruptcy  Court  enclosed in order (the  "Confirmation
Order") which confirmed a Chapter 11 Joint Plan of Reorganization as modified by
ERLY and WEI (the "Debtors").  The Confirmation Order provides that all entities
who have held,  hold or may hold a claim  against the  debtors  are  permanently
enjoined on or after the confirmation  date (August 20, 1999) from making demand
on, commencing, or continuing in any manner any action or proceeding of any kind
with respect to any claim against the Debtors.

Since  emerging from  bankruptcy on August 21, 1999, the Company is not aware of
any legal  proceedings  that have been  brought  or may be brought  against  the
Company.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits Exhibits required to be attached by Item 601 of Regulation S-B
         are listed in the Index to Exhibits on page 6 of this Form 10-QSB,  and
         are incorporated herein by this reference.














                                        5

<PAGE>



                                   SIGNATURES


In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, this 17th day of October, 2000.


Erly Industries, Inc.


/S/ Richard Surber
------------------------------
Richard Surber, Vice President










                                                         6

<PAGE>


INDEX TO EXHIBITS



EXHIBIT       PAGE
NO.      NO.                DESCRIPTION

27       7        Financial Data Schedule "CE"

                                                         7