SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB


(Mark One)
   [X]   Annual report under Section 13 or 15(d) of the Securities Exchange
         Act of 1934 for the fiscal year ended March 31, 2002

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


         Commission file number: 001-07894
                                ----------


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





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



                 268 West 400 South, Salt Lake City, Utah 84101
                ----------------------------------------- ------
               (Address of principal executive office) (Zip Code)


                                 (801) 575-8073
                         ------------------------------
                           (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 June 26, 2002 was 3,773,375.



<PAGE>



                                                 TABLE OF CONTENTS

                                                                           PAGE
                                                      PART I


Item 1.  Description of Business.............................................1

Item 2.  Description of Property.............................................6

Item 3.  Legal Proceedings...................................................6

Item 4.  Submission of Matters to a Vote of Security-Holders.................6


                                                 PART II

Item 5.  Market for Common Equity and Related Stockholder Matters............6

Item 6.  Management's Discussion and Analysis or Plan of Operation...........7

Item 7.  Financial Statements................................................7

Item 8.  Changes in and Disagreements With Accountants on
         Accounting and Financial Disclosure.................................8
                                                PART III

Item 9.  Directors and Executive Officers....................................8

Item 10. Executive Compensation..............................................9

Item 11. Security Ownership of Certain Beneficial Owners and Management.....10

Item 12. Certain Relationships and Related Transactions.....................10

Item 13. Exhibits, List and Reports on Form 8-K.............................11

         Signatures.........................................................12

         Index to Exhibits ......... . . . . . . . . . . . . . . . . . . . .13








                                        1

<PAGE>



                                     PART I
ITEM 1.       DESCRIPTION OF BUSINESS

General.

As used herein the term "Company" refers to Torchmail Communications, Inc., a
Delaware corporation, its consolidated entities, and its predecessors, unless
the context indicates otherwise. The Company emerged from bankruptcy on August
21, 1999 as Erly Industries, Inc. The Company's business plan is to acquire
operations through an acquisition, merger or to begin its own start-up business.
The Company has no current operations and no significant current cash needs. One
of the Company's major shareholders, Hudson Consulting Group, Inc. has been
funding cash needs due to the lack of assets and is expected to continue funding
needs at least through the end of the coming year. 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 the Company's common stock to a subsidiary of
Axia Group, Inc. (Hudson Consulting Group, Inc.) for $120,000 cash. This
transaction was ratified at a special board meeting on October 9, 2000. The
Company then issued 9,237,912 shares of common stock to Hudson. The Company's
board of directors then appointed Richard Surber to the board on November 14,
2000. All other members of the Company's Board of Directors then resigned
leaving Richard D. Surber as the sole member of the Company's Board of
Directors.

On January 24, 2001, the Company merged with Torchmail Communications Inc., a
Delaware corporation ("Torchmail"). In the merger, shareholders of Erly
Industries, Inc. common stock received 1 share of Torchmail common stock for
every 100 shares of Erly stock owned. Fractional shares were rounded up to the
next whole share. The authorized number of shares of Torchmail is 200,000,000
shares. Following the reverse stock split, the Company had a total of 150,000
shares issued and outstanding.

On June 15, 2001, the Company issued 500,000 shares of common stock
(post-reverse split) to Hudson Consulting Group, Inc., a Nevada Corporation for
services rendered in preparing financial statements and also to pay for expenses
previously paid by Hudson in the Company's behalf. The Company is currently a
78.5% owned subsidiary of Nexia Holdings, Inc. which is a subsidiary of Axia
Group, Inc.

On March 17, 2002, the Company effected a 5 for 1 forward split to all
shareholders of record on the date March 15, 2002. Fractional shares were
rounded up to the nearest share.

Since the Company emerged from bankruptcy, it has attempted to identify and
acquire a favorable business opportunity. The Company has reviewed and evaluated
a number of business ventures for possible acquisition or participation by the
Company. The Company has not entered into any agreement, nor does it have any
commitment or understanding to enter into or become engaged in a transaction as
of the date of this filing. The Company continues to investigate, review, and
evaluate business opportunities as they become available and will seek to
acquire or become engaged in business opportunities at such time as specific
opportunities warrant.

To date, opportunities have been made available to the Company through its
officers and directors and through professional advisors including securities
broker-dealers and through members of the financial community. It is anticipated
that business opportunities will continue to be available primarily from these
sources.

                                        1

<PAGE>




To a large extent, a decision to participate in a specific business opportunity
may be made upon management's analysis regarding the quality of the other firm's
management and personnel, the asset base of such firm or enterprise, the
anticipated acceptability of new products or marketing concepts, the merit of
the firm's business plan, and numerous other factors which are difficult, if not
impossible, to analyze through the application of any objective criteria.

The Company currently has entered into negotiations with another company but has
not made any fully agreed upon commitments or arrangements to participate in a
business. It is emphasized that the business objectives discussed herein are
extremely general and are not intended to be restrictive on the discretion of
the Company's management.

There are no plans or arrangements proposed or under consideration for the
issuance or sale of additional securities by the Company prior to the
identification of an acquisition candidate. Consequently, management anticipates
that it may be able to participate in only one potential business venture, due
primarily to the Company's limited capital. This lack of diversification should
be considered a substantial risk, because it will not permit the Company to
offset potential losses from one venture against gains from another.

Selection of a Business

The Company anticipates that businesses for possible acquisition will be
referred by various sources, including its officers and directors, professional
advisors, securities broker-dealers, venture capitalists, members of the
financial community, and others who may present unsolicited proposals. The
Company will not engage in any general solicitation or advertising for a
business opportunity, and will rely on personal contacts of its officers and
directors and their affiliates, as well as indirect associations between them
and other business and professional people. By relying on "word of mouth", the
Company may be limited in the number of potential acquisitions it can identify.
While it is not presently anticipated that the Company will engage unaffiliated
firms specializing in business acquisitions or reorganizations, such firms may
be retained if management deems it in the best interest of the Company.
Compensation to a finder or business acquisition firm may take various forms,
including one-time cash payments, payments based on a percentage of revenues or
product sales volume, payments involving issuance of securities (including those
of the Company), or any combination of these or other compensation arrangements.
Consequently, the Company is currently unable to predict the cost of utilizing
such services.

The Company will not restrict its search to any particular business, industry,
or geographical location, and management reserves the right to evaluate and
enter into any type of business in any location. The Company may participate in
a newly organized business venture or a more established company entering a new
phase of growth or in need of additional capital to overcome existing financial
problems. Participation in a new business venture entails greater risks since in
many instances the management of such a venture will not have proved its
ability, the eventual market of such venture's product or services will likely
not be established, and the profitability of the venture will be unproved and
cannot be predicted accurately. If the Company participates in a more
established firm with existing financial problems, it may be subjected to risk
because the financial resources of the Company may not be adequate to eliminate
or reverse the circumstances leading to such financial problems.


                                        2

<PAGE>



In seeking a business venture, the decision of management will not be controlled
by an attempt to take advantage of any anticipated or perceived appeal of a
specific industry, management group, product, or industry, but will be based on
the business objective of seeking long-term capital appreciation in the real
value of the Company.

The analysis of new businesses will be undertaken by or under the supervision of
the officers and directors. In analyzing prospective businesses, management will
consider, to the extent applicable, the available technical, financial, and
managerial resources; working capital and other prospects for the future; the
nature of present and expected competition; the quality and experience of
management services which may be available and the depth of that management; the
potential for further research, development, or exploration; the potential for
growth and expansion; the potential for profit; the perceived public recognition
or acceptance of products, services, or trade or service marks; name
identification; and other relevant factors. It is anticipated that the results
of operations of a specific firm may not necessarily be indicative of the
potential for the future because of the requirement to substantially shift
marketing approaches, expand significantly, change product emphasis, change or
substantially augment management, and other factors.

The Company will analyze all available factors and make a determination based on
a composite of available facts, without reliance on any single factor. The
period within which the Company may participate in a business cannot be
predicted and will depend on circumstances beyond the Company's control,
including the availability of businesses, the time required for the Company to
complete its investigation and analysis of prospective businesses, the time
required to prepare appropriate documents and agreements providing for the
Company's participation, and other circumstances.

Acquisition of a Business

In implementing a structure for a particular business acquisition, the Company
may become a party to a merger, consolidation, or other reorganization with
another corporation or entity; joint venture; license; purchase and sale of
assets; or purchase and sale of stock, the exact nature of which cannot now be
predicted. Notwithstanding the above, the Company does not intend to participate
in a business through the purchase of minority stock positions. On the
consummation of a transaction, it is likely that the present management and
shareholders of the Company will not be in control of the Company. In addition,
a majority or all of the Company's directors may, as part of the terms of the
acquisition transaction, resign and be replaced by new directors without a vote
of the Company's shareholders.

In connection with the Company's acquisition of a business, the present
shareholders of the Company, including officers and directors, may, as a
negotiated element of the acquisition, sell a portion or all of the Company's
Common Stock held by them at a significant premium over their original
investment in the Company. As a result of such sales, affiliates of the entity
participating in the business reorganization with the Company would acquire a
higher percentage of equity ownership in the Company. Although the Company's
present shareholders did not acquire their shares of Common Stock with a view
towards any subsequent sale in connection with a business reorganization, it is
not unusual for affiliates of the entity participating in the reorganization to
negotiate to purchase shares held by the present shareholders in order to reduce
the amount of shares held by persons no longer affiliated with the Company and
thereby reduce the potential adverse impact on the public market in the
Company's common stock that could result from substantial sales of such shares
after the business reorganization. Public investors will not receive any portion
of the premium that may be paid in the foregoing circumstances. Furthermore, the
Company's

                                        3

<PAGE>



 shareholders  may not be afforded an  opportunity  to approve or consent to any
particular stock buy-out transaction.

In the event sales of shares by present shareholders of the Company, including
officers and directors, is a negotiated element of a future acquisition, a
conflict of interest may arise because directors will be negotiating for the
acquisition on behalf of the Company and for sale of their shares for their own
respective accounts. Where a business opportunity is well suited for acquisition
by the Company, but affiliates of the business opportunity impose a condition
that management sell their shares at a price which is unacceptable to them,
management may not sacrifice their financial interest for the Company to
complete the transaction. Where the business opportunity is not well suited, but
the price offered management for their shares management will be tempted to
effect the acquisition to realize a substantial gain on their shares in the
Company. Management has not adopted any policy for resolving the foregoing
potential conflicts, should they arise, and does not intend to obtain an
independent appraisal to determine whether any price that may be offered for
their shares is fair. Stockholders must rely, instead, on the obligation of
management to fulfill its fiduciary duty under state law to act in the best
interests of the Company and its stockholders.

It is anticipated that any securities issued in any such reorganization would be
issued in reliance on exemptions from registration under applicable federal and
state securities laws. In some circumstances, however, as a negotiated element
of the transaction, the Company may agree to register such securities either at
the time the transaction is consummated, under certain conditions, or at
specified times thereafter. Although the terms of such registration rights and
the number of securities, if any, which may be registered cannot be predicted,
it may be expected that registration of securities by the Company in these
circumstances would entail substantial expense to the Company.

The issuance of substantial additional securities and their potential sale into
any trading market which may develop in the Company's securities may have a
depressive effect on such market.

While the actual terms of a transaction to which the Company may be a party
cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to structure the acquisition as a so-called
"tax-free" event under sections 351 or 368(a) of the Internal Revenue Code of
1986, (the "Code"). In order to obtain tax-free treatment under section 351 of
the Code, it would be necessary for the owners of the acquired business to own
80% or more of the voting stock of the surviving entity. In such event, the
shareholders of the Company would retain less than 20% of the issued and
outstanding shares of the surviving entity. Section 368(a)(1) of the Code
provides for tax-free treatment of certain business reorganizations between
corporate entities where one corporation is merged with or acquires the
securities or assets of another corporation. Generally, the Company will be the
acquiring corporation in such a business reorganization, and the tax-free status
of the transaction will not depend on the issuance of any specific amount of the
Company's voting securities. It is not uncommon, however, that as a negotiated
element of a transaction completed in reliance on section 368, the acquiring
corporation issue securities in such an amount that the shareholders of the
acquired corporation will hold 50% or more of the voting stock of the surviving
entity. Consequently, there is a substantial possibility that the shareholders
of the Company immediately prior to the transaction would retain less than 50%
of the issued and outstanding shares of the surviving entity. Therefore,
regardless of the form of the business acquisition, it may be anticipated that
stockholders, immediately prior to the transaction, will experience a
significant reduction in their percentage of ownership in the Company.


                                        4

<PAGE>



Notwithstanding the fact that the Company is technically the acquiring entity in
the foregoing circumstances, generally accepted accounting principles will
ordinarily require that such transaction be accounted for as if the Company had
been acquired by the other entity owning the business and, therefore, will not
permit a write-up in the carrying value of the assets of the other company.

The manner in which the Company participates in a business will depend on the
nature of the business, the respective needs and desires of the Company and
other parties, the management of the business, and the relative negotiating
strength of the Company and such other management.

The Company will participate in a business only after the negotiation and
execution of appropriate written agreements. Although the terms of such
agreements cannot be predicted, generally such agreements will require specific
representations and warranties by all of the parties thereto, will specify
certain events of default, will detail the terms of closing and the conditions
which must be satisfied by each of the parties prior to such closing, will
outline the manner of bearing costs if the transaction is not closed, will set
forth remedies on default, and will include miscellaneous other terms.

Operation of Business After Acquisition

The Company's operation following its acquisition of a business will be
dependent on the nature of the business and the interest acquired. The Company
is unable to predict whether the Company will be in control of the business or
whether present management will be in control of the Company following the
acquisition. It may be expected that the business will present various risks,
which cannot be predicted at the present time.

Governmental Regulation

It is impossible to predict the government regulation, if any, to which the
Company may be subject to until it has acquired an interest in a business. The
use of assets and/or conduct of businesses which the Company may acquire could
subject it to environmental, public health and safety, land use, trade, or other
governmental regulations and state or local taxation. In selecting a business in
which to acquire an interest, management will endeavor to ascertain, to the
extent of the limited resources of the Company, the effects of such government
regulation on the prospective business of the Company. In certain circumstances,
however, such as the acquisition of an interest in a new or start-up business
activity, it may not be possible to predict with any degree of accuracy the
impact of government regulation. The inability to ascertain the effect of
government regulation on a prospective business activity will make the
acquisition of an interest in such business a higher risk.

Competition

The Company will be involved in intense competition with other business
entities, many of which will have a competitive edge over the Company by virtue
of their stronger financial resources and prior experience in business. There is
no assurance that the Company will be successful in obtaining suitable
investments.

Employees

The Company is a development stage company and currently has no employees.
Executive officers, will devote only such time to the affairs of the Company as
they deem appropriate, which is estimated to be

                                        5

<PAGE>



approximately 10 hours per month per person. Management of the Company expects
to use consultants, attorneys, and accountants as necessary, and does not
anticipate a need to engage any full-time employees so long as it is seeking and
evaluating businesses. The need for employees and their availability will be
addressed in connection with a decision whether or not to acquire or participate
in a specific business industry.

ITEM 2.       DESCRIPTION OF PROPERTY

The Company owns no real property. The Company currently uses the offices,
office equipment and support staff of Hudson Consulting Group, Inc. ("Hudson")
at 268 West 400 South, Suite 300, Salt Lake City, Utah 84101. The Company
currently has no written lease agreement with Hudson.

ITEM 3.       LEGAL PROCEEDINGS

The Company is currently not a party to or aware of any pending legal
proceeding.

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote by the shareholders during the period
covered by this report.

                                     PART II

ITEM 5.       MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's common stock is traded on the National Quotation Bureau "Pink
Sheets" under the symbol "TCHM."

The table below sets forth the high and low sales prices for the Company's
Common Stock for the first quarter of 2002, each quarter of 2001. The quotations
below reflect inter-dealer prices, without retail mark-up, mark-down or
commission and may not represent actual transactions:

                                    Quarter           High*              Low*
                                    -------           -----              ---
                  2001              First            $.60              $.20
                  ----
                                    Second           $1.00             $.20
                                    Third            $1.00             $.20
                                    Fourth           $1.00             $.20

                                    Quarter           High              Low
                                    -------           ----              ---
                  2002              First            $1.10             $.25
                  ----

* On March 18, 2002, the Company effected a five (5) for one (1) forward split
of its shares. Prices listed for the periods in 2001 and 2002 are adjusted to
reflect prices as if the split had been effective.

Record Holders

As of June 24, 2002, there were 1,095 holders of record holding a total of
3,773,375 shares of stock. The holders of the Common Stock are entitled to one
vote for each share held of record on all matters submitted

                                        6

<PAGE>



to a vote of stockholders. Holders of the Common Stock have no preemptive rights
and no right to convert their Common Stock into any other securities. There are
no redemption or sinking fund provisions applicable to the Common Stock.

Dividends

The Company has not declared any cash dividends since emerging from bankruptcy
and does not anticipate paying any dividends in the foreseeable future. The
payment of dividends is within the discretion of the Board of Directors and will
depend on the Company's earnings, capital requirements, financial condition, and
other relevant factors. There are no restrictions that currently limit the
Company's ability to pay dividends on its Common Stock other than those
generally imposed by applicable state law.

RECENT SALES OF UNREGISTERED SECURITIES

The following is a list of all unregistered securities sold by the Company
within the period covered by this report, including, where applicable, the
identity of the person who purchased the securities, title of the securities,
and the date sold.

ITEM 6.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS

Plan of Operations

The Company's plan of operation for the coming year, as discussed above, is to
identify and acquire a favorable business opportunity. The Company does not plan
to limit its options to any particular industry, but will evaluate each
opportunity on its merits. Since the Company has no operations at present, its
cash needs are minimal. The Company believes it can meet its cash needs for the
foreseeable future from its current assets and cash contributions or payments in
behalf of the Company from its parent company. The Company has no plans for the
purchase or sale of any plant or equipment during the coming fiscal year.

The Company was briefly a holding company but is now, at the time of this
filing, a development stage company and currently has no employees. The Company
has no current plans to make any changes in the number of employees.

ITEM 7.           FINANCIAL STATEMENTS

         The Company's financial statements for the fiscal years ended March 31,
2002 and 2001, are attached hereto as pages F-1 through F- 11.









                                        7

<PAGE>











                         TORCHMAIL COMMUNICATIONS, INC.
                        (FORMERLY ERLY INDUSTRIES, INC.)
                          (A Development Stage Company)

                        CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2002 and 2001
























                                        8

<PAGE>



                         TORCHMAIL COMMUNICATIONS, INC.
                        (FORMERLY ERLY INDUSTRIES, INC.)
                          (A Development Stage Company)

                                      INDEX



                                                       Page

Independent Auditors' Report                            F-2

Consolidated Balance Sheets                             F-4

Consolidated Statements of Operations                   F-5

Consolidated Statements of Stockholders' Deficit        F-6

Consolidated Statements of Cash Flows                   F-7

Notes to Consolidated Financial Statements              F-8




















                                       F-1

<PAGE>


                          Jones Simpkins & Associates
                                   95 W 100 S
                                Logan, UT 84323
                             Telephone 435-752-1510

                          INDEPENDENT AUDITORS' REPORT

To the Stockholders' and
Board of Directors of
Torchmail Communications, Inc. (formerly Erly Industries, Inc.)

We have audited the consolidated balance sheets of Torchmail Communications,
Inc. (formerly Erly Industries, Inc.) (a development stage company), as of March
31, 2002 and 2001 and the related consolidated statements of operations,
stockholders' deficit, and cash flows for the years then ended and the
cumulative amounts since inception of development stage. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Torchmail
Communications, Inc. (formerly Erly Industries, Inc.) (a development stage
company), as of March 31, 2002 and 2001 and the results of its operations and
its cash flows for the years then ended and the cumulative amounts since
inception of development stage, in conformity with accounting principles
generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company's revenue generating activities
are not in place, they have a stockholders' deficit and the Company has incurred
a loss. These conditions raise substantial doubt about its ability to continue
as a going concern. Management's plans regarding those matters also are
described in Note 2. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

   /s/ Jones Simkins

Jones Simkins, LLP
Logan, Utah
June 14, 2002


                                       F-2

<PAGE>




                         TORCHMAIL COMMUNICATIONS, INC.
                        (FORMERLY ERLY INDUSTRIES, INC.)
                          (A Development Stage Company)
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
<S>                                                                <C>                   <C>

                                                                                  March 31,
                              ASSETS                                          2002               2001
                              ------
                                                                        ----------------    --------------

Current assets:
  Marketable securities, available for sale                           $           12,500                 -
                                                                        ----------------    --------------

        Total current assets                                          $           12,500                 -
                                                                        ================    ==============

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
  Accounts Payable                                                    $           17,614                 -
  Related party payable                                                           19,002             6,967
                                                                        ----------------    --------------
        Total current liabilities                                                 36,616             6,967

Commitments and contingencies                                                          -                 -

Stockholders' deficit:
    Preferred stock, $.001 par value, 10,000,000 shares authorized
          no shares issued and outstanding                                             -                 -
    Common stock, $.001 par value, 200,000,000 shares authorized
          3,773,375 and 750,000 shares issued and outstanding,
          respectively                                                             3,773               750
    Additional paid-in capital                                                   181,922           119,250
    Deficit accumulated during the development stage                           (209,811)         (126,967)
                                                                        ----------------    --------------

     Total stockholders' deficit                                                (24,116)           (6,967)
                                                                        ----------------    --------------

     Total liabilities and stockholders' deficit                      $           12,500                 -
                                                                        ================    ==============
</TABLE>


                    See the Notes to the Financial Statements




                                       F-3

<PAGE>




                         TORCHMAIL COMMUNICATIONS, INC.
                        (FORMERLY ERLY INDUSTRIES, INC.)
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
<S>                                                 <C>                     <C>                <C>

                                                                 Years Ended   March 31,             Cumulative
                                                               2002                 2001             Amounts
                                                          ---------------      --------------     -------------

Revenue                                                $               -                   -                  -


General and administrative costs                                   82,844              17,235           502,753
                                                          ---------------      --------------     -------------

    Loss from operations                                         (82,844)            (17,235)         (502,753)

Other income (expense):
     Interest income                                                   -               5,624              7,329
     Refund of funds previously expended                               -                   -            194,382
                                                          ---------------      --------------     -------------

    Loss before income taxes and extraordinary item              (82,844)             (11,611)        (301,042)

Provision for income taxes                                              -                   -                  -
                                                          ---------------      --------------     -------------

    Loss before extraordinary item                               (82,844)            (11,611)         (301,042)

Extraordinary item - gain of forgiveness of debt,
     net of taxes of $0                                                 -              91,231            91,231
                                                          ---------------      --------------     -------------

    Net income (loss)                                  $         (82,844)              79,620         (209,811)
                                                          ===============      ==============     =============


Income (loss) per common share - basic and diluted:    $           (0.11)                0.15

Weighted average common shares - basic and diluted                741,000             542,000
                                                          ===============      ==============
</TABLE>


                    See the Notes to the Financial Statements




                                       F-4

<PAGE>




                         TORCHMAIL COMMUNICATIONS, INC.
                         ------------------------------
                        (FORMERLY ERLY INDUSTRIES, INC.)
                         (A Developmental Stage Company)
                           CONSOLIDATED STATEMENTS OF
                     STOCKHOLDERS' DEFICIT August 21, 1999 (
                     Date of Inception of Development Stage)
                                to March 31, 2002

<TABLE>
<CAPTION>
<S>                                          <C>        <C>          <C>            <C>     <C>       <C>        <C>
                                                                                                         Deficit
                                                                                                         Accumulated
                                                                                                         During the
                                                                                                         Development
                                                                                                         Stage
                                                                                                         ----------

                                                                                               Additional
                                                                                               aid-in
                                                                                               Capital
                                                                                               ----------
                                                Preferred  Stock          Common Stock
                                                Shares     Amount       Shares         Amount                       Total
                                                --------   -----------  -------------   ------                      --------------
Balance at August 21, 1999
    (date of inception of development stage)    -$    -    -            5,762,088 $    - $     -  $      - $        -

Effect of 1 for 100 reverse stock split         -          -            (5,704,467)    -       -         -          -

Effect of 5 for 1 stock split                   -          -               230,484     -       -         -          -

Net loss                                        -          -            -              -       -         (206,587)  (206,587)

------------------------------------------------------------------ -------------------------- -- -------------- ---------------
Balance at March 31, 2000                       -          -              288,105      -       -         (206,587)  (206,587)

Issuance of common stock for cash               -          -              461,895      750     119,250   -          120,000

Net income                                      -          -            -              -       -         79,620     79,620

------------------------------------------------------------------ -------------------------- -- -------------- ---------------
Balance at March 31, 2001                       -          -              750,000      750     119,250   (126,967)  (6,967)

Issuance of common stock for:
   Marketable securities, available-for-sale    -          -              250,000      250     12,250    -          12,500
   Related party payable                        -          -              428,000      428     6,539     -          6,967
   Services                                     -          -            2,322,000      2,322   43,906    -          46,228

Additional shares issued as a result
of reserve stock split                          -          -               23,375      23      (23)      -          -

Net loss                                        -          -                   -       -       -         (82,844)   (82,844)

------------------------------------------------------------------ -------------------------- -- -------------- ---------------
Balance at March 31, 2002                       -$         -            3,773,375  $   3,773 $ 181,922 $ (209,811)  $     (24,116)
</TABLE>

                    See the Notes to the Financial Statements


                                       F-5

<PAGE>




                         TORCHMAIL COMMUNICATIONS, INC.
                         ------------------------------
                        (FORMERLY ERLY INDUSTRIES, INC.)
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
<S>                                                   <C>                <C>                 <C>
                                                                   Years Ended March 31,             Cumulative
                                                                 2002                2001              Amounts
                                                            ---------------    ----------------    ---------------
Cash flows from operating activities:
    Net income (loss)                                    $         (82,844) $            79,620 $       (209,811)
    Adjustments to reconcile net income (loss) to
      net cash used in operating activities:
          Issuance of common stock for services                      46,228                    -           46,228
          Increase (decrease) in:
                Accounts payable                                     17,614                    -           17,614
                Related party payable                                19,002            (393,033)           25,969
                                                            ---------------    ----------------    ---------------
               Net cash used in operating activities                      -            (313,413)        (120,000)


Cash flows from investing activities:                                     -                    -                -

Cash flows from financing activities:
    Issuance of common stock for cash                                     -              120,000          120,000
                                                            ---------------    ----------------    ---------------
               Net cash provided by financing activities                  -              120,000          120,000

Net (decrease) increase in cash                                           -            (193,413)                -

Cash, beginning of period                                                 -              193,413                -
                                                            ---------------    ----------------    ---------------

Cash, end of period                                     $                 -                  -                    -
                                                            ===============    ================    ===============

</TABLE>



                    See the Notes to the Financial Statements


                                       F-6

                                     <PAGE>


                 TORCHMAIL COMMUNICATIONS, INC. AND SUBSIDIARIES
                        (FORMERLY ERLY INDUSTRIES, INC.)
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             March 31, 2002 and 2001


Note 1 - Organization and Summary of Significant Accounting Policies

Organization

     The consolidated financial statements consist of Torchmail  Communications,
Inc.  (Torchmail)  (formerly Erly Industries,  Inc. (Erly)) and its wholly owned
subsidiaries,   Watch-Edge   International,   Inc.  (WEI)  (formerly   Chemonics
Industries,  Inc.),  the Beverage  Sourch,  Inc.,  Erly Juice,  Inc.,  Chemonics
Fire-Trol,  Inc. and Chemonics  International,  Inc. (Collectively the Company).
All of the  subsidiaries  have been  inactive  since  August  21,  1999 (date of
inception of development stage).

Torchmail Communications, Inc. (Torchmail) (formerly Erly Industries, Inc.)
(Erly) was organized under the laws of the State of Delaware on December 7, 2000
exclusively for the purpose of merging with Erly and thus changing Erly's state
of incorporation from California to Delaware. On January 24, 2001, the Company's
stockholders approved the merger agreement between Torchmail and Erly. Terms of
the merger agreement provide for Torchmail to be the surviving entity, for all
issued and outstanding common shares of Erly to be exchanged for common shares
of Torchmail on a 1 for 100 basis, that the director and officers of Erly will
continue in office and the merger will become effective upon filing with the
Secretary of State of Delaware, which occurred on January 26, 2001. Prior to the
merger, Torchmail had no assets or liabilities and had no significant business
activities.

Effective August 21, 1999 (date of inception of development stage), the Company
became a development stage company as defined in SFAS No. 7 and has not, thus
far, commenced planned principal operations. The Company proposes to seek
business ventures that will allow for long-term growth.

Reorganization

On September 28, 1998, the Company filed a voluntary petition for reorganization
under Chapter 11 of the United States Bankruptcy Code. On August 20, 1999, the
bankruptcy was discharged.

Principles of Consolidation

The consolidated financial statements include the financial statements of the
Company and its subsidiaries. All significant intercompany balances and
transactions have been eliminated.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly
liquid investments with a maturity of three months or less to be cash
equivalents.

Marketable Securities

The Company classifies its marketable debt and equity securities as "held to
maturity" if it has the positive intent and ability to hold the securities to
maturity. All other marketable debt and equity securities are classified as
"available for sale." Securities classified as "available for sale" are carried
in the financial statements at fair value. Realized gains and losses, determined
using the specific identification method, are included in operations; unrealized
holding gains and losses are reported as a separate component of equity.
Securities classified as held to maturity are carried at amortized cost. For
both categories of securities, declines in fair value below amortized cost



                                       F-7

<PAGE>


                 TORCHMAIL COMMUNICATIONS, INC. AND SUBSIDIARIES
                                     (FORMERLY ERLY INDUSTRIES, INC.)
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             March 31, 2002 and 2001

Note 1 - Organization and Summary of Significant Accounting Policies (continued)

that are other than temporary are included in operations. As of March 31, 2002
the cost of the available-for-sale marketable securities approximates fair
value.

Income Taxes

Deferred income taxes are provided in amounts sufficient to give effect to
temporary differences between financial and tax reporting, principally related
to net operating loss carryforwards.

Earnings Per Share

The computation of basic earnings per common share is based on the weighted
average number of shares outstanding during the period.

The computation of diluted earnings per common share is based on the weighted
average number of shares outstanding during the period plus the common stock
equivalents which would arise from the exercise of stock options and warrants
outstanding using the treasury stock method and the average market price per
share during the period. Common stock equivalents are not included in the
diluted earnings per share calculation when their effect is antidilutive. The
Company does not have any stock options or warrants outstanding at March 31,
2002 and 2001.

Concentration of Credit Risk

The Company maintains its cash in bank deposit accounts, which, at times, may
exceed federally insured limits. The Company has not experienced any losses in
such accounts and believes it is not exposed to any significant credit risk on
cash and cash equivalents.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with generally accepted
accounting principles 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.

Note 2 - Going Concern

As of March 31, 2002, the Company's revenue generating activities are not in
place, they have a stockholders deficit and the Company has incurred a loss for
the year then ended. These factors raise substantial doubt about the Company's
ability to continue as a going concern.

Management intends to seek additional funding through business ventures. There
can be no assurance that such funds will be available to the Company, or
available on terms acceptable to the Company.




                                       F-8

<PAGE>


                 TORCHMAIL COMMUNICATIONS, INC. AND SUBSIDIARIES
                                     (FORMERLY ERLY INDUSTRIES, INC.)
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             March 31, 2002 and 2001

Note 3 - Related Party Payable

The related party payable consists of unsecured, non-interest bearing cash
advances from the major stockholder of the Company. During the year ended March
31, 2002, the Company issued 85,600 shares of common stock in exchange for
$6,967 of related party payables.

Note 4 - Preferred Stock

The Company's preferred stock may have such rights, preferences and designations
and may be issued in such series as determined by the Board of Directors. No
shares were issued and outstanding at March 31, 2002 and 2001.

Note 5 - Income Taxes

The difference between income taxes at statutory rates and the amount presented
in the financial statements is a result of the following:

<TABLE>
<CAPTION>
<S>                                   <C>                     <C>                  <C>
                                                     Years Ended
                                                        March 31,                      Cumulative
                                                  2002                 2001                Amounts
Income tax provision (benefit)
 at statutory rate                       $          (28,000)              27,000             (71,000)
Change in valuation allowance                       28,000               (27,000)             71,000
                                         $          -                    -                    -
                                            ===============      ===============      ==============

Deferred tax assets are as follows at March 31:

                                                  2002                 2001

Operating loss carryforwards             $       34,147,000           34,119,000
Valuation allowance                             (34,147,000)         (34,119,000)
                                         $          -                    -
                                            ===============      ===============

</TABLE>

The Company has net operating loss carryforwards of approximately $100,433,000,
which begin to expire in the year 2006. The amount of net operating loss
carryforwards that can be used in any one year will be limited by: 1)
significant changes in the ownership of the Company, 2) future Company
operations being similar to the operations that ultimately generated the net
operating losses and 3) by the applicable tax laws which are in effect at the
time such carryforwards can be utilized. During the year ended March 31, 2001,
the Company had a significant change in ownership due to the issuance of 92,379
shares of common stock (see statement of stockholders' deficit).

The NOL is subject to certain tax sharing agreements and continuing disputes
with its former subsidiary. Management does not know whether the NOL will have
any significant value after any adjustments for events occurring during past
bankruptcy proceedings including the sale of assets, forgiveness of
indebtedness, as well as the possible de-consolidation of its former subsidiary
for income tax purposes.



                                       F-9

<PAGE>


                 TORCHMAIL COMMUNICATIONS, INC. AND SUBSIDIARIES
                                     (FORMERLY ERLY INDUSTRIES, INC.)
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             March 31, 2002 and 2001


Note 5 - Income Taxes (cont.)

Due to the contingencies noted in the previous two paragraphs, management has
established a full valuation allowance at March 31, 2002 and 2001.

Related to the significant uncertainty associated with the NOLs described above,
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, uncertainties exist as to the possibility that income
taxes may be owed by the Company. The income tax returns for the periods ended
March 31, 2002, 2001, 2000 and 1999 have not yet been filed by the Company.
These financial statements do not provide for any possible income taxes that
could ultimately be owed by the Company.

Note 6 - Refund of Funds Previously Expended

During February 2000, the Beverage Source, a wholly owned subsidiary, received a
refund of funds previously held in escrow by an engineering firm for the purpose
of funding environmental remediation. Management had previously estimated that
no funds held in escrow would be recoverable and accordingly estimated no value
to the escrow funds or no additional liability related to the remediation
matter.

The recovery of these funds has been recorded as other income in the post
bankruptcy operations of the Company ended March 31, 2000. Management believes
there are no rights or claims to assets of The Beverage Source, which did not
file for bankruptcy. The possibility remains that litigation could be brought
against the Company by creditors to the previously described bankruptcy
proceedings, or by others, making claim to the assets of The Beverage Sourch
which were previously estimated to have no value. At March 31, 2002 and 2001
management has not established a liability to reflect such contingent
liabilities or claims if they in fact emerge.

Note 7 - Extraordinary Item

During the year ended March 31, 2001, the Company satisfied a related party
payable to its former Chairman of the Board, President and Chief Executive
Officer. The $400,000 payable was satisfied with a cash payment of approximately
$308,769 resulting in a gain from the forgiveness of debt of approximately
$91,231.

Note 8 - Supplemental Cash Flow Information

No amounts were paid for interest or income taxes during the years ended March
31, 2002 and 2001.

The Company issued 50,000 shares of common stock in exchange for investments,
available-for-sale of $12,500.

The Company issued 85,600 shares of common stock in exchange for a related party
payable of $6,967.

Note 9 - Common Stock Splits

On March 17, 2002, the Company approved a 5-for-1 common stock split and on
January 26, 2001, as part of the merger agreement between Torchmail and Erly
(see Note 1), the Company completed a 1-for-100 reverse common stock split. All
common share amounts and per share information have been retroactively adjusted
to reflect these common stock splits in the accompanying consolidated financial
statements.



                                      F-10

<PAGE>


                 TORCHMAIL COMMUNICATIONS, INC. AND SUBSIDIARIES
                                     (FORMERLY ERLY INDUSTRIES, INC.)
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             March 31, 2002 and 2001

Note 10 - Contingencies

The Company has been involved in significant litigation related to actions
brought prior to its bankruptcy petition and as a part of its bankruptcy
proceedings. Based on management's assessment of these proceedings, and
considering the reorganization discussed in Note 1, the balance sheets presented
provide no liabilities for such litigation and asserted or unasserted contingent
liabilities at March 31, 2002 and 2001.

Note 11 - Recent Accounting Pronouncements

The FASB recently issued FASB Statement No. 143, "Accounting for Asset
Retirement Obligations". This Statement addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. This Statement applies to all
entities. This Statement amends SFAS 19. The effective date for the Statement is
June 15, 2002. The Company does not expect the adoption of SFAS 143 to have a
material impact on its financial position and future operations.

The FASB recently issued FASB Statement No. 144, "Accounting for the Impairment
and Disposal of Long-Lived Assets". The new guidance resolves significant
implementation issues related to FASB Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of".
Statement 144 is effective for fiscal years beginning after December 15, 2001.
Management does not expect the adoption of SFAS No. 144 to have a material
impact on its financial position or results of operations.

In July 2001, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (FAS) No. 141, "Business Combinations" and No.
142, "Goodwill and Other Intangible Assets." The statements eliminate the
pooling-of-interests method of accounting for business combinations and require
that goodwill and certain intangible assets not be amortized. Instead, these
assets will be reviewed for impairment annually with any related losses
recognized in earnings when incurred. The adoption of these statements is not
expected to have a material effect on the company's financial position or
results of operations.



                                      F-11

<PAGE>




ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

On July 31, 2001, Postlethwaite & Netterville APAC ("Postlethwaite") resigned as
the principle accountants of Torchmail Communications Inc., (fka Erly
Industries, Inc.) ("the Company") previously engaged to audit the Company's
financial statement. Effective August 1, 2001, the Company retained Jones
Simkins LLP ("Jones") as the principal accountants to replace Postlethwaite. The
Company's audit committee and board of directors approved the change of
accountants from Postlethwaite to Jones.

The audit reports of Postlethwaite on the Company's financial statements for the
fiscal year ending March 31, 2000, did not contain any adverse opinion or
disclaimer of opinion, nor were they qualified or modified as to uncertainty,
audit scope, or accounting principles, except such reports were modified to
include an explanatory paragraph for a going concern uncertainty.

In connection with the audit of the fiscal year ending March 31, 2001, and the
subsequent interim periods through June 30, 2001, prior to the date of
dismissal, the Company had no disagreements with Postlethwaite on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures. Had there been any disagreements that were not resolved to
their satisfaction, such disagreements would have caused Postlethwaite to make
reference in connection with their opinion to the subject matter of the
disagreement. In addition, during that time there were no reportable events (as
defined in Item304(a) (1) (iv) of Regulation S-B).

During the fiscal years ending March 31, 2000 and 2001, and the subsequent
interim period through June 30, 2001, and through to the date of dismissal, and
prior to such appointment, the Company did not consult with Jones regarding the
application of generally accepted accounting principles to a specific
transaction, either proposed or completed, or the type of audit opinion that
might be rendered on the Company's financial statements. Since there were no
disagreements or reportable events (as defined in Item 304(a) (2) of Regulation
S-B), the Company did not consult Postlethwaite regarding the application,
either proposed or completed, of the type of audit opinion that might be
rendered on the Company's financial statements. Since there were no
disagreements or reportable events (as defined in Item 304(a)(2) of Regulation
S-B), the Company did not consult Postlethwaite in respect to these matters
during that time.

                                    PART III

ITEM  9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Name                                Age      Position(s) and Office(s)

Rowan Campbell                      35       President and Director

Christina Barnes                    35       Director

Richard Surber                      29       Director

Rowan S. Campbell, 35, Mr. Campbell has a PhD. in Biomedical Sciences from
University of North Texas at Fort Worth. He also has a Bachelor of Science
degree in Zoology (1993) and a Bachelor of Science degree in Biology (1995) from
the University of Texas at Austin. He has gained experience since 1995, working
in research for the Department of Pathology, University of North Texas Health
Science Center on projects including FBI technical DNA analysis methodology
validation, development of systems


                                        8

<PAGE>



for evidence capture for sexual assault, and studies on short tandem repeat
(STR) loci for use in US Combined DNA index systems. His experience provides a
valuable knowledge base to the Company used in evaluating possible merger
candidates.

Christina Barnes, 35, Ms. Barnes graduated from the University of Texas at
Austin with a Bachelor of Arts degree in English. Currently, and for the past 5
years, she works as Research Manager for Datamark, Inc., a direct response
marketing company for 2 and 4 year public and private educational institutions
(ie. colleges and universities). Ms. Barnes' responsibilities include oversight
of demographic and market analysis and research used in developing strategies
for educational institutions in planning for site changes, location suitability,
name branding, image management, and trend analysis. Her experience and
knowledge of population changes, demographics, and market analysis is a valuable
asset being employed in locating and selecting merger candidates.

Richard D. Surber, 29, Mr. Surber graduated from the University of Utah with a
Bachelor of Science degree in Finance and then with a Juris Doctorate with an
emphasis in corporate law, including securities, taxation, and bankruptcy. Since
1992, he has gained extensive experience serving as an officer and/or director
of many public and private companies listed in more detail below.

Mr. Surber has been an officer and director of several public companies,
including: Axia Group, Inc., a holding company with real estate and consulting
subsidiaries (president, CEO and Director from March 1994 to present), Elocity
Networks Corp., an Internet company (president and director from June 1999 to
April 10, 2000); Nexia Holdings, Inc. (fka Kelly's Coffee Group, Inc.), formerly
a shell company which acquired many of Axia Group, Inc's holdings in exchange
for stock (president and director from May 1999 to the present); Wichita
Development Corporation, owner of an office building in Wichita, Kansas
(president and director December 15, 1999 to November, 12, 2001); and Golden
Opportunity Development Corporation ("GODC"), a majority owned subsidiary of
Axia, (president and director from September 1999 to December 19, 2001). Mr.
Surber is also the president and a director of several reporting and non-
reporting shell companies. These shell companies intend to become fully
reporting public companies.

Compliance with Section 16(a) of the Exchange Act

Based solely upon a review of Forms 3, 4 and 5 furnished to the Company, the
Company is not aware of any person who at any time during the fiscal year ended
March 31, 2002, was a director, officer, or beneficial owner of more than ten
percent of the Common Stock of the Company, and who failed to file, on a timely
basis, reports required by Section 16(a) of the Securities Exchange Act of 1934
during such fiscal year.

ITEM  10.         EXECUTIVE COMPENSATION

Executive Compensation

Except as to Nanette Kelly, a former president and Director, as set out below,
no compensation in excess of $100,000 was awarded to, earned by, or paid to any
executive officer of the Company during the fiscal years ended March 31, 2002 or
2001. During the past fiscal year, no cash compensation was paid to or accrued
by Rowan Campbell, who became the Company's Chief Executive Officer on September
10, 2002. He did receive 10,000 (pre-5 for 1 split) restricted shares of stock
in conjunction with his appointment as President and Director.

Nanette Kelly received $228,000 from the Company during the fiscal year ended
March 31, 2001. This money was paid for accrued and unpaid salary and expenses
owed to Ms. Kelly for her services as President and CEO of the Company through
the date of her resignation on December 18, 2000.


                                        9

<PAGE>




Compensation of Directors

The Company's directors are not currently compensated.

ITEM 11.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT

The following table sets forth certain information concerning the ownership of
the Company's Common Stock as of June 24, 2002, with respect to: (i) each person
known to the Company to be the beneficial owner of more than five percent of the
Company's Common Stock; (ii) all directors; and (iii) directors and executive
officers of the Company as a group. The notes accompanying the information in
the table below are necessary for a complete understanding of the figures
provided below. As of June 24, 2002, there were 3,773,375 shares of Common Stock
issued and outstanding.

<TABLE>
<CAPTION>
<S>                        <C>                                               <C>                    <C>

                                                                                AMOUNT AND
         TITLE OF                      NAME AND ADDRESS OF                      NATURE OF              PERCENT OF
          CLASS                          BENEFICIAL OWNER                       BENEFICIAL               CLASS
                                                                                OWNERSHIP
-------------------------- --------------------------------------------  ------------------------ --------------------
       Common Stock                 Rowan Campbell, President                     50,000                 1.33%
    ($0.001) par value
       Common Stock                 Christina Barnes, Director                    50,000                 1.33%
    ($0.001) par value                 1403 East 900 South
                                    Salt Lake City, Utah 84105
       Common Stock                  Richard Surber, Director                   2,961,9001               78.49%
    ($0.001 par value)            268 West 400 South, Suite 306
                                    Salt Lake City, Utah 84101
       Common Stock                Wasatch Capital Corporation                   461,900                 12.24%
    ($0.001) par value            268 West 400 South, Suite 300
                                    Salt Lake City, Utah 84101
       Common Stock               Hudson Consulting Group, Inc.                 2,500,000                66.25%
    ($0.001) par value            268 West 400 South, Suite 300
                                    Salt Lake City, Utah 84101
       Common Stock           Directors and Executive Officers as a             3,061,900                81.14%
    ($0.001) par value                        Group
       Common Stock                 Bottomline Home Loan, Inc.                   250,000                 6.62%
    ($0.001) par value                 200 South Los Robles
                                    Pasadena California 91101
</TABLE>

ITEM 12.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     During the past two years the Company has not been a party to any  material
transaction(s) with any officer or director of the Company, or owner of 5%
or more of the Company's outstanding securities, or any member of the
immediate family of any such person.

     1 Richard  Surber may be deemed a beneficial  owner of 2,961,900  shares of
the Company's  common stock by virtue of his position as an officer and director
of  Wasatch  Capital  Corporation  and  Hudson  Consulting  Group,  Inc.  Of the
2,961,900  common  shares  beneficially  owned,  Mr. Surber  personally  owns no
shares.


                                       10

<PAGE>




ITEM 13.          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 beginning on page 13 of this
         Form 10-KSB, which is incorporated herein by reference.

(b)      Reports on Form 8-K.
         -------------------




                                       11

<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 27th day of June 2002.


Torchmail Communications, Inc.



   /s/ Rowan Campbell
------------------------------------------------------
Rowan Campbell, President and Director




In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.


Signature                   Title                     Date



 /s/ Rowan Campbell
  Rowan Campbell            President and Director    June 27, 2002



  /s/ Christina Barnes
Christina Barnes            Director                  June 27, 2002



  /s/ Richard D. Surber
-------------------------
Richard D. Surber           Director                  June 27, 2002





                                       12

<PAGE>






                                INDEX TO EXHIBITS

EXHIBIT           PAGE
NO.               NO.          DESCRIPTION

3(i)              *          Articles of Incorporation of Torchmail
                             Communications, Inc. (Incorporated by
                             reference from Form 14C filed 12/19/2000).

3(ii)             *          Agreement of Merger of Erly Industries, Inc. into
                             Torchmail Communications,
                             Inc. (Incorporated by reference from
                             Form 10-QSB filed August 1, 2001).



* Incorporated by reference from previous filings of the Company.

























                                       13

<PAGE>