SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

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

     For  the  quarterly  period  ended  September 30, 2001

                                or

[  ]    TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR
        15(d)  OF  THE  SECURITIES  EXCHANGE  ACT  OF  1934
        For  the  transition  period  from     to

                        Commission file number: 333-39254

                             EXPORT EREZ USA, INC.
              (Exact name of small business issuer in its charter)

       Delaware                                       52-2237043
---------------                                       ----------
(State  or  other  jurisdiction  of                (I.R.S. Employer
incorporation  or organization)                    Identification No.)

                               Industrial Zone Erez
                                  P.O. Box 779
                             Ashkelon, Israel 78101
              ----------------------------------------------------
              (Address of principal executive offices)  (zip code)

                 Issuer's Telephone Number:  011 972 7 689 1611

Indicate  by check mark whether the registrant (1) filed all reports required to
be  filed  by  Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  last 12 months (or for such shorter period that the registrant was required
to  file such reports), and (2) has been subject to such filing requirements for
the  past  90  days.

                    Yes   X                  No

Indicate  the  number  of  shares outstanding of each of the issuer's classes of
common  equity,  as  of  the  latest  practicable  date.


            Class                         Outstanding  at September 30,  2001

Common  Stock,  par  value  $0.0001              13,157,900

<PAGE>
                                     PART I
                   PART  I  --  FINANCIAL  INFORMATION

ITEM  1.  FINANCIAL  STATEMENTS


                              EXPORT EREZ USA, INC.
                                AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS
                            AS OF SEPTEMBER 30, 2001



<PAGE>

                     EXPORT EREZ USA, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                    CONTENTS
                                    --------



<S>    <C>    <C>
PAGES  1-2   CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30,
             2001 (UNAUDITED) AND DECEMBER 31, 2000

PAGE     3   CONSOLIDATED STATEMENTS OF INCOME AND
             COMPREHENSIVE INCOME (LOSS) FOR THE THREE AND
             NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000 (UNAUDITED)

PAGE     4   CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
             NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000 (UNAUDITED)

PAGES  5-7   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF
             SEPTEMBER 30, 2001

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                       EXPORT EREZ USA, INC. AND SUBSIDIARIES
                            CONSOLIDATED BALANCE SHEETS
                            ---------------------------

                                       ASSETS
                                       ------
                                                           September 30,   December 31,
                                                               2001          2000
                                                           (Unaudited)
                                                        ---------------  ----------
<S>                                                              <C>           <C>
CURRENT ASSETS
Cash and cash equivalents                                  $    591,001  $  663,295
Trade accounts receivable, net                                2,658,380     901,382
Trade accounts receivable - related parties, net                154,278       6,049
Other receivables and debit balances                            684,398      37,228
Inventory                                                     1,801,528     892,466
Deferred taxes                                                   99,927      33,077
                                                           ------------  ----------
  Total Current Assets                                        5,989,512   2,533,497
                                                           ------------  ----------

NON-CURRENT ASSETS
Investment in marketable securities                             597,233     795,074
Deposits for the severance of employer-employee relations       430,420     261,095
Deferred taxes                                                  480,612      52,952
Intangible assets                                                64,659      77,963
                                                           ------------  ----------
   Total Non-Current Assets                                   1,572,924   1,187,084
                                                           ------------  ----------

PROPERTY, PLANT AND EQUIPMENT, NET                            2,017,966     404,751
                                                           ------------  ----------
TOTAL ASSETS                                               $  9,580,402  $4,125,332
-------------                                              ============  ==========
</TABLE>
    The accompanying notes are an integral part of the financial statements.

<PAGE>

<TABLE>
<CAPTION>
                          EXPORT EREZ USA, INC. AND SUBSIDIARIES
                               CONSOLIDATED BALANCE SHEETS
                               ---------------------------
                           LIABILITIES AND SHAREHOLDERS' EQUITY
                           ------------------------------------

                                                             September 30,   December 31,
                                                                 2001           2000
                                                              (Unaudited)
                                                           ----------------  -----------
<S>                                                             <C>              <C>
CURRENT LIABILITIES
Short-term bank credit                                          $ 2,807,701   $  716,482
Trade accounts payable                                            1,907,189    1,085,755
Other accounts payable and credit balances                          852,795      277,966
                                                                ------------  -----------
  Total Current Liabilities                                       5,567,685    2,080,203
                                                                ------------  -----------

LONG - TERM LIABILITIES
Long-term loans                                                      57,405       10,885
Provision for the severance of employer-employee relations          408,908      180,121
                                                                ------------  -----------
   Total Long-Term Liabilities                                      466,313      191,006
                                                                ------------  -----------

TOTAL LIABILITIES                                                 6,033,998    2,271,209
                                                                ------------  -----------
MINORITY INTERESTS                                                  521,471            -
                                                                ------------  -----------
SHAREHOLDERS' EQUITY
Preferred stock, $0.0001 par value, 20,000,000 shares
 authorized, none issued and outstanding                                  -            -
Common stock, $0.0001 par value, 100,000,000 shares
 authorized, 13,157,900 and 12,500,000 issued and outstanding         1,316        1,250
Additional paid-in capital                                        1,146,169      159,385
Retained earnings                                                 2,332,997    1,823,902
Accumulated other comprehensive income (loss)                      (455,549)    (130,414)
                                                                ------------  -----------
   Total Shareholders' Equity                                     3,024,933    1,854,123
                                                                ------------  -----------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                      $ 9,580,402   $4,125,332
--------------------------------------------------------------  ------------  -----------
</TABLE>

    The accompanying notes are an integral part of the financial statements.

<PAGE>
<TABLE>
<CAPTION>

                                      EXPORT EREZ USA, INC. AND SUBSIDIARIES
                                         CONSOLIDATED STATEMENTS OF INCOME
                                          AND COMPREHENSIVE INCOME (LOSS)
                                                    (UNAUDITED)
                                                    -----------

                                                           For the Three   For the Three   For the Nine   For the Nine
                                                           Months Ended    Months Ended    Months Ended   Months Ended
                                                           September 30,   September 30,   September 30,  September 30,
                                                                2001          2000          2001           2000
                                                            ------------  -------------   ------------  ------------
<S>                                                               <C>           <C>           <C>           <C>
REVENUES                                                    $ 3,599,774   $   955,970   $ 5,639,032   $ 3,502,039
Cost of sales and processing                                  2,438,100       643,261     3,812,089     2,219,898
                                                            ------------  -------------   ------------  ------------
Gross profit                                                  1,161,674       312,709     1,826,943     1,282,141
                                                            ------------  -------------   ------------  ------------

OPERATING EXPENSES
Selling expenses                                                122,385        91,617       224,282       187,909
General and administrative expenses                             416,202        84,833       680,770       423,940
                                                            ------------  -------------   ------------  ------------
TOTAL OPERATING EXPENSES                                        538,587       176,450       905,052       611,849
                                                            ------------  -------------   ------------  ------------
INCOME FROM OPERATIONS                                          623,087       136,259       921,891       670,292
                                                            ------------  -------------   ------------  ------------
OTHER INCOME (LOSS)
Interest, dividends and gain (loss) on sale of securities
income, net                                                     (26,509)      (30,709)      (56,555)      (92,947)
Other income - net                                                4,878             9        53,906         2,298
Less minority interest in income of subsidiary                  (36,474)            -       (43,787)            -
                                                            ------------  -------------   ------------  ------------
TOTAL OTHER INCOME (LOSS)                                       (58,105)      (30,700)      (46,436)      (90,649)
                                                            ------------  -------------   ------------  ------------
INCOME BEFORE INCOME TAXES                                      564,982       105,559       875,455       579,643
Income tax expense                                              268,619           405       366,362       224,950
                                                            ------------  -------------   ------------  ------------
NET INCOME                                                  $   296,363   $   105,154   $   509,093   $   354,693
                                                            ------------  -------------   ------------  ------------

OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation gain (loss), net of minority
 interest                                                       (98,235)       26,624      (156,377)       46,662
Unrealized gain (loss) on available-for-sale securities         (72,453)      (12,359)     (166,435)       41,869
                                                            ------------  ------------  ------------  ------------
Other comprehensive income (loss) before tax                   (170,688)       14,265      (322,812)       88,531

Income tax (expense) benefit related to items of other
 comprehensive income                                            61,447        (5,159)      116,212       (31,895)
                                                            ------------  -------------  ------------  ------------
TOTAL OTHER COMPREHENSIVE INCOME
 (LOSS), NET OF TAX                                            (109,241)        9,106      (206,600)       56,636
                                                            ------------  -------------  ------------  ------------
COMPREHENSIVE INCOME (LOSS)                                 $   187,122   $   114,260   $   302,493   $   411,329
---------------------------                                 ============  =============  ============  ============

Net income per ordinary share - basic and diluted           $       .02   $       .01   $      0.04   $      0.03
                                                            ============  =============  ============  ============
Weighted average number of shares outstanding during
 the period - basic and diluted                              13,157,900    12,500,000    12,753,038    12,235,401
                                                            ============  =============  ============  ============


    The accompanying notes are an integral part of the financial statements.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                             EXPORT EREZ USA, INC. AND SUBSIDIARIES
                                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                          (UNAUDITED)
                                                          -----------


                                                                                                 For The Nine      For The Nine
                                                                                                 Months Ended      Months Ended
                                                                                                 September 30,     September 30,
                                                                                                     2001              2000
                                                                                                  ----------       ------------
<S>                                                                                                   <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income                                                                                        $ 509,095        $   354,693
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization                                                                        85,981             55,032
Stock based compensation                                                                                  -            153,900
Gain from investment in marketable securities                                                             -             (3,282)
Gain from sale of fixed assets                                                                      (24,902)            (2,298)
Minority interest in income of subsidiary                                                            43,786                  -
Decrease (increase) in deposits for employee severance                                               31,090             16,135
Decrease (increase) in deferred taxes                                                               206,643            (55,758)
Decrease (increase) in accounts receivable                                                         (140,338)            10,268
Decrease (increase) in other receivables and debit balances                                        (195,261)            64,428
Decrease (increase) in inventory                                                                    371,778           (112,412)
Increase (decrease) in trade accounts payable                                                      (573,716)          (413,696)
Increase (decrease) in other accounts payable and credit balances                                   153,553            100,882
Increase (decrease) in provision for employee severance                                             (11,862)                 -
                                                                                                  ----------       ------------
  Net Cash Provided By (Used In) Operating Activities                                               455,847            167,892
                                                                                                  ----------       ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets                                                                            (80,033)           (54,101)
Proceeds from sale of fixed assets                                                                   27,221              2,456
Investment in marketable securities                                                                 (27,699)          (324,461)
Proceeds from sale of marketable securities                                                               -          1,425,947
Cash acquired in acquisition of Achidatex                                                            39,147                  -
Advances related to acquisition, net                                                                 56,820                  -
Loan to subsidiary                                                                                 (480,000)                 -
                                                                                                  ----------       ------------
  Net Cash Provided By (Used In) Investing Activities                                              (464,544)         1,049,841
                                                                                                  ----------       ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term bank credit, net                                                                          13,116         (1,280,464)
Long-term bank credit, net                                                                                -             26,299
Proceeds used to pay long-term loan                                                                 (16,527)                 -
                                                                                                  ----------       ------------
  Net Cash Provided By (Used In) Financing Activities                                                (3,411)        (1,254,165)
                                                                                                  ----------       ------------
Effect of exchange rate changes on cash                                                             (60,186)            21,963
                                                                                                  ----------       ------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                (72,294)           (14,469)

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                                                     663,295            681,291
                                                                                                  ----------       ------------
CASH AND CASH EQUIVALENTS - END OF PERIOD                                                         $ 591,001        $   666,822
-----------------------------------------                                                         ==========       ============

INTEREST PAID                                                                                     $  45,886        $    70,571
                                                                                                  ==========       ============
TAXES PAID                                                                                        $  67,419        $   183,696

    The accompanying notes are an integral part of the financial statements.

</TABLE>

<PAGE>
                     EXPORT EREZ USA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            AS OF SEPTEMBER 30, 2001
                          ----------------------------


NOTE  1     BASIS  OF  PRESENTATION
-------     -----------------------

The  accompanying unaudited consolidated financial statements have been prepared
in  accordance  with  generally accepted accounting principles and the rules and
regulations  of  the  Securities  and  Exchange Commission for interim financial
information.  Accordingly, they do not include all the information and footnotes
necessary  for a comprehensive presentation of financial position and results of
operations.

It  is  management's opinion that all material adjustments (consisting of normal
recurring  adjustments)  have been made which are necessary for a fair financial
statement  presentation.  The results for the interim period are not necessarily
indicative  of  the  results  to  be  expected  for  the  year.

For  further  information,  refer  to  the consolidated financial statements and
footnotes  included in the Company's Form 10-KSB for the year ended December 31,
2000.

NOTE  2     INVENTORY
-------     ---------
<TABLE>
<CAPTION>
Inventory  at  September  30,  2001  consisted  of  the  following:


<S>              <C>
Raw materials    $  954,354
Work in process     568,023
Finished goods      279,151
                ------------
                 $1,801,528
                ============
</TABLE>


NOTE  3     LONG-TERM  LOAN
-------     ---------------

On  February  1,  2000,  the  Company's wholly owned subsidiary Export Erez Ltd.
borrowed  $123,750  at  an  interest  rate  of  10.8%.  The terms are 24 monthly
payments commencing March 1, 2000 with each payment consisting of a fixed amount
of principal along with accrued interest.  As of September 30, 2001, the balance
of  the  loan  was  $24,091, all of which is included in short-term bank credit.

On  March  7,  2000,  Achidatex  Nazareth  Elite  (1977) Ltd. ("Achidatex"), the
Company's  newly  acquired  subsidiary,  borrowed $27,500 at an interest rate of
8.18%  (See Note 5).  The terms are 36 monthly payments commencing April 1, 2000
with  each  payment consisting of a fixed amount of principal along with accrued
interest.  As  of  September  30,  2001, the balance of the loan was $13,811, of
which  $4,318  is  included  in short-term bank credit and $9,493 is included in
long-term  loan.

<PAGE>
                     EXPORT EREZ USA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           AS OF SEPTEMBER 30, 2001
                          ----------------------------

On  July  15, 1997, Achidatex also borrowed approximately $50,000 from a related
party at an interest rate linked to the CPI.  The note is due and payable at the
Company's  discretion.  As  of  September  30, 2001, the balance of the loan was
$47,912,  all  of  which  is  included  in  long-term  loan.

NOTE  4     STOCKHOLDERS'  EQUITY
-------     ---------------------

In  June  2001,  the Company authorized the issuance of 657,900 shares of common
stock  to  acquire  76%  of  the  outstanding  shares of Achidatex (See Note 5).
Although  the  stock  certificates  for  the  657,900 shares were not physically
issued  until  August 8, 2001, the shares were effectively issued as of June 18,
2001.

NOTE  5     ACQUISITION  OF  SUBSIDIARY
-------     ---------------------------

ACHIDATEX  NAZARETH  ELITE  (1977)  LTD.
----------------------------------------

Effective  June 18, 2001, the Company acquired 76% of the total share capital of
Achidatex  Nazareth Elite (1977) Ltd. ("Achidatex") by issuing 657,900 shares of
its  common  stock valued at $1.50 per share resulting in a total purchase price
of  $986,850.  The  acquisition  has  been  accounted  for  as  a  purchase, and
accordingly, the consolidated financial statements have been prepared to include
the  results  of operations of Achidatex beginning from the date of acquisition.
The excess of the total net fair value of the assets acquired of $1,512,668 over
the  purchase price of $986,850, in the amount of $525,818, has been recorded as
a  reduction in the fair market value assigned to the fixed assets of Achidatex.

NOTE  6     PURCHASE  OF  ASSETS
-------     --------------------

On  May  9, 2001, the Company purchased from Orlite Ltd. $7,245 of equipment and
$13,025  of  inventory  used  in  the  production of ballistic helmets including
intangible  knowledge.  The Company began manufacturing ballistic helmets during
the  period  and  the  results  are  included  in  the  accompanying  financial
statements.

NOTE  7     SEGMENTS
-------

The  Company  has  two  strategic  business  units:  the civilian market and the
military  market.  The  military market is further broken down between local and
export sales in order to better analyze trends in sales and profit margins.  The
Company  does  not  allocate  assets between segments because several assets are
used  in  more  than  one  segment  and  any  allocation  would  be impractical.

<PAGE>

                     EXPORT EREZ USA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            AS OF SEPTEMBER 30, 2001
                          ----------------------------
<TABLE>
<CAPTION>
                         Civilian   Military  Military
                          Local      Local    Export   Consolidated
                       ------------ -------- --------- ------------
<S>                        <C>        <C>        <C>      <C>
September 30, 2001
Net Sales               2,264,649  2,514,289  860,094     5,639,032
Income from operations    411,800    395,485  114,606       921,891

September 30, 2000
Net Sales               1,248,276  1,307,689  946,074     3,502,039
Income from operations    295,642    186,359  188,291       670,292
</TABLE>
<PAGE>


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

Operations

Export Erez USA, Inc. is a holding company whose subsidiaries, Export Erez, Ltd.
and  Mayotex. Ltd., have been operating in excess of ten years. Export Erez Ltd.
was  formed  and  registered on January 23, 1983 under the name R.T.V. Ltd. as a
limited  shares company under the Companies Ordinance of the State of Israel and
changed  its  name  to  Export  Erez  Ltd.  on  April 25, 1987. Export Erez Ltd.
primarily  produces  and  markets  textile products designed to provide personal
protection,  such  as  bulletproof  vests, and associated heavy fabric products,
such as tents and other camping equipment. It has been a supplier to the Israeli
military  for  over  12  years.

Mayotex  Ltd.  was formed and registered on March 7, 1990 as a limited liability
company  under  the  Companies  Ordinance  of  the  State of Israel.  Mayotex is
engaged  in weaving, improving, processing, dyeing, cutting and sewing of fabric
to make the heavyduty and sometimes bulletproof fabrics used by Export Erez Ltd.
to  manufacture  its  finished  products  and  goods.

In October, 2000, Export Erez Ltd. created a wholly-owned subsidiary, Dragonwear
Trading  Ltd.,which is incorporated in Cyprus and which is involved with trading
textile  products.

Export  Erez  USA's  facilities  are  staffed  partly  (approximately  27%) by a
Palestinian  workforce, hired with the cooperation of the Palestinian Authority.
Should  the  Middle  East  peace  process  continue  to  lead  to  a decrease in
hostilities  and  normalization  of  relations  with the Arab and Islamic world,
Export Erez USA believes that its history of cooperation and employment with the
Gazan  Palestinians  and the Palestinian Authority will lead to opportunities to
penetrate  markets  in  the  Arab  and  Islamic  world.  If  needed, the Company
believes  that it will be able to employ Israeli workers to satisfy its demands.

Export  Erez  USA  anticipates  that  it  may  expand  its  operations  through
development  of  its own marketing and sales and through acquisitions of similar
or  related  companies.

Overview

Export  Erez  USA's  strategic  objectives  are  as  follows:

-    To  develop  high  tech  products,  including:  stabproof fabric, ballistic
     helmets,  ballistic  ceramic  boards,  oneway  protective  windows,  Kevlar
     fabric, dry storage, ballistic wall coverings, and oil and fuel pillow type
     storage  tanks  in  the  year  2001  to  2002.

-    To  increase its share of the local defense market to about 50% by the year
     2004.

-    To increase its share of the local civilian market to about 35% by the year
     2004.

-    To  penetrate the international defense market with business worth about $1
     million  growing  by  about  $1.5  million  per  annum  to  the  year 2004.

-    To  extend  activity  in  the  international  civilian market starting with
     activity  worth  about  $0.3  million growing by about $0.50.75 million per
     annum  to  the  year  2004.


<PAGE>
Achidatex  Nazareth  Acquisition

     On  June  12,  2001,  Export  Erez USA, Inc. entered into an agreement with
Achidatex Nazareth Illit Ltd., Achidatex Ltd., and the shareholders of Achidatex
Nazareth  for  the  acquisition  of  76%  of the outstanding shares of Achidatex
Nazareth  in  exchange for the issuance of shares of common stock of Export Erez
USA  aggregating  657,900  common  shares  which  represents  5%  of  its  then
outstanding  shares  of  common  stock.  Export Erez USA has agreed that such 5%
ownership  of  shares  shall  not  be  diluted  as  a  result of its issuance of
additional shares until closing of the first public offering of the common stock
of  Export  Erez.

     The  acquisition was effected on June 18, 2001. As part of the acquisition,
all  patents  connected  with Achidatex Nazareth and held by its shareholders or
anyone  on  their behalf were transferred to Export Erez.  Achidatex Nazareth is
the  manufacturer/producer  of  ballistic  shields,  long  term storage systems,
combat  flak  jackets  and  tents.

Export  Erez  agreed  to  loan  Achidatex  Nazareth $500,000 for payment to Bank
Hapoalim  Ltd.  against the release of an encumbrance in the amount of $900,000.
Export  Erez  also  agreed  to  give  to  Bank  Igud of Israel securities and/or
guarantees  in the amount of $500,000 to secure the credit given by Bank Igud to
Achidatex  Nazareth.


Results  and  Plan  of  Operations

During  1999,  bulletproof  vests  developed  by  Export  Erez  USA were sent to
laboratories  in  the  United  States  for testing, and following the tests, the
products  were  deemed  to have met the American N.I.G. standard. Obtaining this
standard  is intended to provide Export Erez USA's products with entree into the
American  market,  and  to  encourage  development  of  other  markets.


During  1999,  Export  Erez  USA  enlarged  its  Internet  Web  site in order to
participate  in the worldwide trend towards more electronic trade.  The web site
is  located  at  www.exporterez.co.il.
                 --------------------

At  the  end  of  2000  and  beginning  of 2001, Export Erez USA purchased heavy
machines  and knowledge in manufacturing ballistic ceramic boards and started to
produce  and  sell  in  Israel  and  abroad  its  new  products.

Expanding  its  product  range  requires  Export  Erez  USA to make considerable
investments  in research and development, and penetrating markets outside Israel
also  involves heavy expenses.  Export Erez USA intends to develop the following
products  between  2001  and  2003: antistab cloth, ballistic helmets, ballistic
ceramic plates, oneway protective windows, Kevlar fabric, dry storage, ballistic
wall  coverings,  and  oil  and  fuel  pillow  type  storage  tanks.

Export  Erez  USA  intends  to  spend  funds, when and if available, if ever, on
commencing  production  and  marketing  of  new  products, construction of a new
manufacturing  and  office  complex,  new  equipment  and upgrading its existing
equipment.

     Export Erez USA intends to apply for listing on the NASD OTC Bulletin Board
or  for  quotation of its securities on the Nasdaq SmallCap Market.  Export Erez
USA  anticipates that it will offer additional shares of its common stock to the
public  with  a  view toward raising additional capital with which to effect its
development  plans.  Management also believes that if Export Erez USA is able to
establish  a  public  trading  market  on  the NASD OTC Bulletin Board or Nasdaq
SmallCap  Market  it  will  increase  Export Erez USA's visibility to government
authorities  and  additional  potential  civilian  customers.


<PAGE>
Nine  Months  Ending  September 30, 2001 Compared to Nine Months Ended September
30,  2000

Sales  in  the  nine  months  ending  September  30,  2001  increased  to
5,639,032 compared  to $3,502,039  in the previous year due to increase in local
military  demand  and  acquisition  of  Achidatex  ltd.

The cost of sales and processing inceased in the nine months ended September 30,
2001  at  $3,812,089 compared to $2,219,898 for the same nine months in 2000 due
to  reasons  described  above.

Selling  expenses  in  the  nine  months  ended  September 30, 2001 increased to
$224,282  compared to $187,909 for the same nine months in 2000.  This change is
the  result  of  acquisition  of  Achidatex

General  and  administrative  costs  in the nine months ended September 30, 2001
increased  to  $680,770  compared  to $423,940 for the same nine months in 2000,
primarily  the  result  of  acquisition  0f  Achidatex.

Open  Orders

     Unfulfilled  open  orders at September 30, 2001, totaled $5,000,000 and are
scheduled  for  filling  within  the  next  4  months.

Liquidity  and  Capital  Resources

     Export  Erez USA's current activities are financed by short term bank loans
balanced by short term deposits.  The decision regarding the amount of the loans
was  derived  from considerations of the yield on the deposit which is generally
in  foreign  currency  (receipts  from  overseas sales), compared to the cost of
short  term  loans.

In  the years 2001 and 2002, Export Erez USA anticipates increasing its research
and  development  of  certain  items, primarily ballistic helmets, stabresistant
fabric,  ceramic  ballistic  plates  and oneway protective windows.  Export Erez
anticipates  total  research  and  development  expenses  for  2002  and 2003 at
approximately  $3,950,000  and  $3,250,000  respectively.  Export  Erez  USA
anticipates  that  in the year 2004 research and development expenses would drop
to  approximately  $350,000.

The development of these products will be with staff engineers.  Export Erez USA
will  work  in  the  development  of  the  ballistic  helmets.  Export  Erez USA
anticipates  that these products will be approximately  in 20% production in the
year  2002  increasing  to  full  production  by the year 2005.  Export Erez USA
anticipates  that  in  order  to  fund  the  research  and development for these
products,  it  may  effect an offering of its equity securities.  If Export Erez
USA  is unable to effect an offering of its securities, it may fund its research
and  development  through its operating funds.  In such event, the timing of its
anticipated research and development and subsequent production schedule would be
slowed.

Export  Erez borrowed N.I.S. 2,000,000 from Bank Hapoalim to invest in Achidatex
Nazareth.  The  loan  is  linked  to the Consumer Price Index.  Export Erez will
give  Bank  Igyd  of  Israel  guarantees in the amount of $500,000 to secure the
credit  given  by  Bank  Igyd  to  Achidatex.

<PAGE>

                          PART II -- OTHER INFORMATION

ITEM  1.  LEGAL  PROCEEDINGS

There are no legal proceedings against the Company and the Company is unaware of
such  proceedings  contemplated  against  it.

ITEM  2.  CHANGES  IN  SECURITIES

Not  applicable.

ITEM  3.  DEFAULTS  UPON  SENIOR  SECURITIES

Not  applicable.

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

Not  applicable.

ITEM  5.  OTHER  INFORMATION

Not  applicable.

ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

(a)     Exhibits

(b)     Reports  on  Form  8-K

Export  Erez  filed  a Current Report on Form 8-K on August 3, 2001 noticing its
acquisition  of  assets of Achidatex Nazareth Acquisition and an Amended Current
Report  on  Form  8-K/A  on September 6, 2001 filing the financial statements in
regard  to  such  acquisition  of  assets.

<PAGE>

                                   SIGNATURES

Pursuant  to  the  requirements  of  the  Securities  Exchange  Act of 1934, the
registrant  has  duly  caused  this  report  to  be  signed on its behalf by the
undersigned  thereunto  duly  authorized.

EXPORT  EREZ  (USA),  INC.


By:/s/  Joseph  Postbinder
     ____________________________________
Joseph  Postbinder

Date:  November  19,  2001