SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended September 30, 2000.
[ ] Transition report under Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ______ to ______ .
Commission file number: 33-2128-D
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ERLY INDUSTRIES, INC.
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(Exact name of small business issuer as specified in its charter)
California 95-2312900
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8641 United Plaza Blvd., Suite 300, Baton Rouge, LA 70809
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(Address of principal executive office) (Zip Code)
(225) 922-4540
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(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
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The number of outstanding shares of the issuer's common stock, $0.001 par value
(the only class of voting stock), as of October 17, 2000 was 5,762,088.
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TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS..................................................3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS..................................4
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.....................................................5
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K......................................5
SIGNATURES.....................................................................6
INDEX TO EXHIBITS..............................................................7
[THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK]
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ITEM 1. FINANCIAL STATEMENTS
As used herein, the term "Company" refers to Erly Industries, Inc., a California
corporation and predecessors unless otherwise indicated. Unaudited, consolidated
interim financial statements including a balance sheet for the Company as of the
quarter ended September 30, 2000 and statements of operations, and statements of
cash flows for the 3 month and 6 months interim periods up to the date of such
balance sheet and the period from inception, August 21, 1999, through September
30, 2000, are attached hereto as Pages F-1 through F-5 and are incorporated
herein by this reference.
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY.]
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INDEX TO FINANCIAL STATEMENTS
PAGE
Consolidated Balance Sheet...................................................F-2
Statements of Unaudited Consolidated Operations..............................F-3
Statement of Unaudited Consolidated Cash Flows...............................F-4
Notes to Unaudited Financial Statements......................................F-5
F-1
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Erly Industries, Inc.
(A Development Stage Company)
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
September 30, 2000
Unaudited
September 30, 2000
----------------------
ASSETS
CURRENT ASSETS
Cash $ 207,742
Refunds receivable 1,963
----------------
Total Current Assets 209,705
TOTAL ASSETS $ 209,705
=================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 10,628
Compensation payable to Officer 400,000
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Total Current Liabilities 410,628
TOTAL LIABILITIES 410,628
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SHAREHOLDERS' EQUITY/ (DEFICIT)
Preferred stock, $100 par value, 6,000
shares authorized; issued and
outstanding -0- shares -
Common stock, $0.01 par value,
15,000,000 shares authorized,
issued and outstanding 5,762,088 -
Deficit accumulated during the development stage (200,923)
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Total Stockholders' Equity (Deficit) (200,923)
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT) $ 209,705
====================
See Notes To Financial Statements.
F-2
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<TABLE>
Erly Industries, Inc.
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
From inception of
Development Stage
on
For the Three For the Six August 21, 1999
months ended months ended through
September 30, September 30 September 30,
2000 2000 2000
------------------ ------------------ -------------------------
<S> <C> <C> <C>
Sales $ - $ - $ -
General and Administrative 1,672 7,113 409,787
------------------ ------------------ -------------------------
Income (Loss) From Operations (1,672) (7,113) (409,787)
------------------ ------------------ -------------------------
Other Income (Expense)
Refund of funds previously expended 3,008 8,340 202,722
Interest income 1,829 4,437 6,142
------------------ ------------------ -------------------------
Total Other Income (Expense) 4,837 12,777 208,864
------------------ ------------------ -------------------------
Net gain (loss) 3,165 5,664 (200,923)
Income taxes - - -
------------------ ------------------ -------------------------
Net Income (Loss) $ 3,165 $ 5,664 $ (200,923)
================== ================== =========================
Income (Loss) per share $ .00 $ .00 $ (.03)
Weighted average shares outstanding 5,762,088 5,762,088 5,762,088
================== ================== =========================
</TABLE>
See Notes to Financial Statements.
F-3
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<TABLE>
ERLY INDUSTRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
From
inception of
Development
Stage on
For the Three For the Six August 21,
months ended months ended 1999 through
September 30, September 30, September 30,
2000 2000 2000
------------------- ------------------- -------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net Gain (Loss) $ 3,165 $ 5,664 $ (200,923)
Adjustments to reconcile to net cash
provided in operating activities:
Increase in refunds receivable (1,963) (1,963) (1,963)
Increase in accounts payable 5,187 10,628 10,628
Increase in other current liabilities - - 400,000
------------------- ------------------- -------------------
Net Cash Provided in Operating
Activities 6,389 14,329 207,742
------------------- ------------------- -------------------
Cash flow from Investing Activities - - -
------------------- ------------------- -------------------
Cash flow from Financing Activities - - -
------------------- ------------------- -------------------
Net Increase (Decrease) in Cash 6,389 14,329 207,742
Cash at Beginning of Period 201,353 193,413 -
------------------- ------------------- -------------------
Cash at End of Period $ 207,742 $ 207,742 $ 207,742
------------------- ------------------- -------------------
Supplemental Disclosures
Interest paid $ - $ - $ -
Income taxes paid - - -
</TABLE>
See Notes to Financial Statements.
F-4
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ERLY INDUSTRIES, INC.
(A Development Stage Company)
Notes to the Unaudited Condensed Consolidated Financial Statements
September 30, 2000
NOTE 1 - PRELIMINARY NOTE
The accompanying condensed financial statements have been prepared
without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and disclosures normally
included in the financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted. These financial statements reflect all adjustments which, in
the opinion of management, are necessary to present a fair statement of
the results for the periods included. It is suggested that these
condensed financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's Annual
Report on Form 10KSB for the period ended March 31, 2000.
NOTE 2 - INCOME TAXES
The Company is not able to determine its net operating loss (NOL)
carryforwards due to significant tax sharing agreements with its former
subsidiary, American Rice, Inc. Due to the inability of management to
determine the amount of NOL as well as the uncertainty of future
taxable income, management has established the valuation allowance to
be any amount necessary to reduce the tax benefit of any NOL to zero.
Related to the uncertainty associated with NOLs, the possibility exists
that the Company could ultimately be liable for income taxes. Although
management believes that the Company should not have taxable income or
liabilities, the possibility does exist. These financial statements do
not provide for any possible income taxes that could ultimately be owed
by the Company.
NOTE 3 - COMPARABLE PERIODS
Normally, the presentation of financial statements for an interim
period include comparable amounts from the previous year. However,
since the Company emerged from Chapter 11 Bankruptcy on August 21,
1999, as a development stage company, comparable period financial
statements are not presented as they would not represent a valid
comparison.
NOTE 4 - COSOLIDATED ENTITIES
The presentation of financial statements represents amounts
consolidated from the following subsidiaries many of which have been
defunct for some time:
* Watch-Edge International (WEI, formerly known as Chemonics
Industries, Inc)
* Chemonics International, Inc. 100% owned by WEI
* Chemonics Fire-Trol, Inc. 100% owned by WEI
* Chemonics Industries LTD (Canada) 100% owned by WEI
* Transcontinental Distribution Company LTD (South Africa) 100%
owned by WEI
* The Beverage Source (discontinued FY 1990)
* Erly Juice, Inc. (discontinued 1993)
* Worldmark, Inc. 99% owned by ERLY, Inc (discontinued Dec. 1993)
* Eau Claire Packing Co., 100% owned by Worldmark, Inc.
(discontinued Dec. 1993)
F-5
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Plan of Operations
As used herein the term "Company" refers to Erly Industries, Inc., a California
corporation, its consolidated entities, and its predecessors, unless the context
indicates otherwise. The Company emerged from bankruptcy on August 21, 1999. The
Company is currently a shell company whose purpose will be to acquire operations
through an acquisition, merger or begin its own start-up business.
The Company is in the process of attempting to identify and acquire a favorable
business opportunity. On March 22, 2000, the Board of Directors accepted the
terms of an agreement to provide a controlling interest of ERLY's common stock
to a group of investors at an undetermined date subsequent to September 30,
2000. As of the date of this filing that transaction has not been finalized and
therefore the parties involved are undisclosed until the transaction is
consummated and the appropriate Form 8-K is filed. There can be no assurance
offered that ERLY will be successful in developing a viable business plan and
obtaining capital necessary to carry out a business plan or to continue as a
going concern.
The Company has no plans for the purchase or sale of any plant or equipment.
The Company is a development stage company and currently has no employees. The
Company has no current plans to make any changes in the number of employees.
Results of Operations
The Company had no sales revenues for the three and six months ended September
30, 2000. The Company had no sales in for the three months and six ended
September 30, 2000 because it emerged from bankruptcy on August 21, 1999,
without operations as a development stage company.
The Company had no costs of sales revenues for the three months and six months
ended September 30, 2000 because it emerged from bankruptcy on August 21, 1999,
without operations as a development stage company.
General and administrative expenses were $1,672 three months ended September 30,
2000 and $7,113 for the six months ended September 30, 2000. The general and
administrative expenses were incurred by activities related to resolving debt
and searching for an appropriate candidate for a reverse merger.
The Company recorded net income of $3,165 for the three months ended September
30, 2000 and net income of $5,664 for the six months ended September 30, 2000.
The net income recorded for the three months ended September 30, 2000 was
attributable to $1,672 in general administrative expenses, an tax refund of
overpayment of $1,045, an insurance refund receivable of $1,963, and $1,829 in
interest income on assets held in bank accounts.
Capital Resources and Liquidity
At September 30, 2000, the Company had current assets of $209,705 and total
assets of $209,705. The Company had a net working capital deficit of $200,923 at
September 30, 2000.
Net stockholders' deficit in the Company was $200,923 as of September 30, 2000.
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The Company's working capital deficit and stockholder's deficit are the result
of a $400,000 liability accepted by the Board of Directors as a post-bankruptcy
liability after it was rejected by the bankruptcy court, and $10,628 in accrued
expenses for stock transfer related activities. The Company received a release
of claims for the $400,000 debt on October 4, 2000 for an amount which is still
under negotiation. The impact of this will be shown on the next quarter's 10QSB
filing.
PART II-OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On August 9, 1999, the Bankruptcy Court enclosed in order (the "Confirmation
Order") which confirmed a Chapter 11 Joint Plan of Reorganization as modified by
ERLY and WEI (the "Debtors"). The Confirmation Order provides that all entities
who have held, hold or may hold a claim against the debtors are permanently
enjoined on or after the confirmation date (August 20, 1999) from making demand
on, commencing, or continuing in any manner any action or proceeding of any kind
with respect to any claim against the Debtors.
Since emerging from bankruptcy on August 21, 1999, the Company is not aware of
any legal proceedings that have been brought or may be brought against the
Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits Exhibits required to be attached by Item 601 of Regulation S-B
are listed in the Index to Exhibits on page 6 of this Form 10-QSB, and
are incorporated herein by this reference.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, this 17th day of October, 2000.
Erly Industries, Inc.
/S/ Richard Surber
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Richard Surber, Vice President
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INDEX TO EXHIBITS
EXHIBIT PAGE
NO. NO. DESCRIPTION
27 7 Financial Data Schedule "CE"
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