U.S. SECURITIES AND EXCHANGE COMMISSION
                                              Washington, D.C. 20549
                                                    FORM 10-KSB

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended July 31, 1998

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

Commission File No.: 0-20277

                                                U.S.A. GROWTH INC.
                                  (Name of small business issuer in its charter)

        Delaware                                                11-2872782   
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

                  900 West 190th Street, New York, New York 10040
                  (Address of principal executive offices) (Zip Code)

Issuer's telephone number: (212) 568-7307

Securities registered under Section 12(b) of the Exchange Act:
None.

Securities registered under Section 12(g) of the Exchange Act:

                                      Common Stock, par value $.001 per share
                                                 (Title of Class)

                  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 [ ]

                  Check  if there  is no  disclosure  of  delinquent  filers  in
response to Item 405 of  Regulation  S-B is not  contained in this form,  and no
disclosure  will  be  contained,  to the  best  of  registrant's  knowledge,  in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-KSB or any amendment to this Form 10-KSB . [x]

                  Issuer's revenues for its most recent fiscal year were
$21,041.

<PAGE>

                  The aggregate market value of the 10,870,000  shares of Common
Stock  held  by  non-affiliates  of  the  Company  as of  October  10,  1998  is
$1,304,400.

                  The  number of shares of  Common  Stock,  par value  $.001 per
share, outstanding as of October 15, 1998, is 11,100,000.

List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K  (e.g.,  Part I, Part II,  etc.)  into  which the  document  is
incorporated:  (1) any  annual  report  to  security-holders;  (2) any  proxy or
information  statement;  and (3) any prospectus filed pursuant to Rule 424(b) or
(c) under the  Securities Act of 1933.  The listed  documents  should be clearly
described for identification  purposes.

                  1.  Part III, Item 13, incorporated by reference the
following Exhibits: 3.1 and 3.2.

                    Exhibit 3.1               Certificate of Incorporation
                    Exhibit 3.2               By-Laws of the Company

<PAGE>



                                                      PART I

Item 1. Description of Business

                  Business Development

                  U.S.A. Growth Inc. ("USA" or the "Company") was
incorporated in Delaware on August 14, 1987. The Company was
organized to provide a vehicle for participating in one or more
business ventures which may become available to the Company which,
in the opinion of management, will provide a profit to the Company.

                  Business of the Company

                  The  Company is not an  operating  business  and has no income
from operations. The Company engages in research either by itself and/or through
the use of  independent  consultants  (who may have to agree to receive stock of
the Company in payment for their  services  in lieu of cash) to  determine  what
type  of  business  can  be  established  by a  new  venture  which  could  have
potentially high profits. On July 1, 1997, the Company entered into an agreement
with World Wide Web  Casinos,  Inc.  (WWWC),  whereby the Company and WWWC would
merge with and into WWWC Acquisition Corporation,  the surviving corporation, in
a tax free  merger.  On January 28, 1998 WWWC  informed  the Company that it was
unable to provide audited  financial  statements which was one of the conditions
for consummating the merger agreements, and WWWC terminated the merger.


                  Competition

                  There are inherent difficulties for any new company seeking to
enter an established field. With regard to the proposed business of the Company,
namely the origination of presently  unknown  subsidiaries  and the operation of
such  subsidiaries,  these  difficulties are compounded since there are numerous
firms which are more  experienced,  better  established and better financed than
the Company in the originating of profitable subsidiaries. Additionally, many of
these firms have personnel experienced in running such subsidiaries,  unlike the
Company. Furthermore, the Company's present capital will only permit the Company
to organize  relatively few subsidiaries  which will face competition from firms
which  are  larger,   more   experienced  and  better   established  than  these
subsidiaries.  Additionally,  small "start-up"  firms such as the Company,  with
insignificant  resources, are at a very serious disadvantage against established
competitors.

                                                        2

<PAGE>



                  Employees

                  At the present time, the Company has no employees and does not
have any present  intention to hire any. Each of the Company's  officers devotes
ten  percent  or less of his time to the  affairs of the  Company,  and does not
receive any remuneration.


Item 2. Description of Property

                  The Company  presently  utilizes the  residence/office  of its
President,  Robert Scher,  located at 900 West 190th Street,  New York, New York
10040, at no cost. Such arrangement is expected to continue as long as Mr. Scher
is President of the Company.

Item 3. Legal Proceedings

                  None.

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

                  None.



                                                         3

<PAGE>

                                                      PART II

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

                  The  Company's  Common  Stock,  par value $.001 per share (the
"Common  Stock"),  is traded on the Bulletin Board. The closing high and low bid
prices for the Common  Stock for the  Company's  prior two fiscal  years were as
follows:

                                                    BID PRICES

                                                   High             Low

Period

Fiscal 1996

Quarter ended July 31, 1996                        .03              .03
Quarter ended April 30, 1996                       .03              .03
Quarter ended January 31, 1996                     .03              .03
Quarter ended October 31, 1995                     .03              .03

Fiscal 1997

Quarter ended July 31, 1997                        .83              .43
Quarter ended April 30, 1997                      1.25              .04
Quarter ended January 31, 1997                     .05              .04
Quarter ended October 31, 1996                     .05              .03

Fiscal 1998

Quarter ended July 31, 1998                        .12              .11
Quarter ended April 30, 1998                       .12              .08
Quarter ended January 31, 1998                     .28              .08
Quarter ended October 31, 1997                     .46              .23

                  The foregoing price  quotations have been reported on the NASD
OTC Bulletin  Board.  Such quotations  represent  inter-dealer  prices,  without
retail   mark-up,   markdown  or  commission   and  may  not  represent   actual
transactions.  There  has  been a  limited  trading  market  for  the  Company's
securities.

                  (b) The number of record  holders  of the  Common  Stock as of
September  30,  1998 was 71.  The  Company  believes  that  there are over 1,200
beneficial  owners of shares of its Common Stock,  based upon  indications  from
brokerage firms.

                  (c) The future payment by the Company of dividends, if any, is
discretionary  with the Board of  Directors  and will depend upon the  Company's
earnings,  capital  requirements  and  financial  condition,  as well  as  other
relevant factors.

                                                         4

<PAGE>



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


Results of Operations

                  The Company is a development  stage company and as of July 31,
1998 had not generated any operating revenue.

                  The Company's only source of revenue since  inception has been
certificate  of  deposit  and money  market  bank  account  interest  income and
dividends from money market mutual funds. The money market funds had a yield for
Fiscal 1998 and 1997 of 2%-5% per annum. The Company  maintains its cash balance
in a  financial  institution.  The  balance is insured  by the  Federal  Deposit
Insurance  Corporation ("FDIC") up to $100,000.  At July 31, 1998, the Company's
cash balance was $8,344,  of which $8,344 was insured by the FDIC. The remaining
funds of $397,011  are invested in  uninsured  money  market  mutual funds which
invests in government  securities.  The Company's revenues increased in 1997 and
1996 over previous  years as a result of the general  increase in interest rates
in the United States in such years.

                  General and  administrative  expenses  during  fiscal 1998 and
1997  were  $28,399  and  $10,563,   respectively.   The  primary   general  and
administrative expenses were professional (legal and accounting), transfer agent
and filing fees.

                  Management  believes that  inflation and changing  prices will
have minimal affect on operations.

Liquidity and Capital Resources

                  The Company has had no material  operations and as of July 31,
1998,  the Company had working  capital of $402,155.  The Company has no present
outside  sources of  liquidity.  In the event the  Company  determines  that its
present  capital is not  adequate  for a future  acquisition,  the  Company  may
attempt to arrange  for  outside  financing  and/or may do a public  offering or
private placement of its securities.


Item 7. Financial Statements

                  The Company's financial statements,  consisting of the balance
sheet for the year ended July 31, 1998,  and related  statements of  operations,
stockholders'  equity, and cash flows for the years ended July 31, 1998 and 1997
and  statement  of  operations  and cash  flows from  August  14,  1987 (date of
inception)  to July 31, 1998,  have been audited by  Rothstein,  Kass & Company,
P.C.  independent  certified public accountants,  which, along with their report
thereon, appears on pages F-1 through F-9 hereof.


                                                         5

<PAGE>



Item 8. Changes In and Disagreements with Accountants on Accounting
and Financial Disclosure

                  None

                                                     PART III


Item 9. Directors and Executive Officers

                  The directors and officers of the Company are as follows:

                  Name                               Age    Position

                  Robert Scher                        56   Chairman of the
                                                           Board of Directors,
                                                           President and
                                                           Treasurer


                  J. Peter Hans                       53  Secretary and Director

                  Robert Scher has been  President  and Chairman of the Board of
the Company since July 10, 1995. In addition,  he has been President,  Treasurer
and Chairman of the Board of two publicly held  corporations,  Hunter Industrial
Facilities,  Inc. and World  Television  Inc. He graduated in 1963 from the City
University of New York, Baruch College,  with a B.A. in Accounting.  He has been
an Associate  Accountant  with the Health and Hospital  Corporation  of New York
since 1971. He has been a private investor for  approximately  thirty years. Mr.
Scher  will  devote  such  time to the  Company  as the Board of  Directors  may
require. It is believed that he will devote approximately 10% of his time to the
affairs of the Company.

                  J.  Peter Hans has been a Director  of the  Company  since its
inception and since 1995 has been its  Secretary.  Since June 1994, Mr. Hans has
been self  employed as a financial  consultant.  From January 1990 to June 1994,
Mr. Hans was  employed by UMB Bank and Trust  Company and most  recently as Vice
President  in the  Private  Banking  Division.  From 1979 to 1990,  Mr. Hans was
employed by Bank Leumi Trust Company of New York in various positions.  Mr. Hans
has completed advance graduate work in International Economics and Finance.

                  The  Company  does  not have  standing  audit,  nominating  or
compensation  committees  of the Board of Directors,  or  committees  performing
similar functions. Last year, the Board of Directors met on two occasions.

                  The term of office of each  director  is one year or until his
successor is elected at the Company's annual meeting and

                                                         6

<PAGE>



qualified. Each officer is appointed by the Board of Directors and
serves at the discretion of the Board.

                  The Certificate of  Incorporation  of the Company provides for
indemnification  of officers and  directors to the fullest  extent  permitted by
Delaware law.

Item 10. Executive Compensation

                  Except for the President  who was issued  130,000  shares,  no
officer or director of the Company has received  any cash or other  remuneration
(directly or indirectly) since the Company's inception,  no one is to receive or
accrue any remuneration from the Company, except as to repayment for accountable
expenses  incurred on the Company's  behalf.  No  remuneration of any nature has
been paid for or on account of services rendered by a director in such capacity.
None of the officers and  directors  intends to devote more than 10% of his time
to the Company's affairs.


Item 11. Security Ownership of Certain Beneficial Owners and
Management

                  The following  table sets forth the number of shares of Common
Stock of the Company beneficially owned, directly or indirectly,  by (i) each of
the Company's  officers and directors;  (ii) all persons known to the Company to
be  beneficial  owners of more than five  percent of the  outstanding  shares of
Common Stock; and (iii) all officers and directors of the Company as a group:


Name and Address                            Number of Shares Owned      Percent

Robert Scher                                  130,000                     1.1
900 West 190th Street
New York, NY 10040

J. Peter Hans                                 100,000                     *
110-50 71st Road
Forest Hills, NY 11375

All Directors and                             230,000                     2
Officers as a group
(two persons)

*Less than one percent

                  The Company is unaware of any  arrangement,  the  operation of
which, at a subsequent date, may result in a change in control of the Company.

                  Effective May 1, 1991, the Securities and Exchange

                                                         7

<PAGE>



Commission promulgated new rules under Section 16 of the Securities Exchange Act
10 1934.  The Company  believes  that during the  preceding  year the  executive
officers and directors have complied with all Section 16 reporting requirements.



Item 12. Certain Relationships and Related Transactions

                  None.


Item 13. Exhibits and Reports on Form 8-K

                  (a)      Exhibits

                  The following exhibits have previously been filed on Form 10-K
for the year  ended  July 31,  1996 and are  hereby  incorporated  by  reference
pursuant to Rule 12b-23:

                           3.1 Certificate of Incorporation

                           3.2 By-Laws of the Company

                  (b)      Reports on Form 8-K

                  The  Company did not file any reports on Form 8-K for its last
quarter in Fiscal 1997.

                                                         8
<PAGE>

                            U.S.A. GROWTH INC.
                       (A Development Stage Company)


                                TABLE OF CONTENTS



Independent Auditors' Report                          F-2

Balance Sheet                                         F-3

Statements of Operations                              F-4

Statements of Stockholders' Equity                    F-5

Statements of Cash Flows                              F-6

Notes to Financial Statements                         F-7-F9


                                       F-1

<PAGE>


                               U.S.A. GROWTH INC.
                          (A Development Stage Company)

                           INDEPENDENT AUDITORS' REPORT




Board of Directors
U.S.A. Growth Inc.


We have  audited  the  accompanying  balance  sheet of  U.S.A.  Growth  Inc.  (a
development  stage  company) as of July 31, 1998 and the related  statements  of
operations,  and cash flows for the  cumulative  period August 14, 1987 (date of
inception) to July 31, 1998 and for the years ended July 31, 1998 and 1997,  and
stockholders' equity for the years ended July 31, 1998 and 1997. These financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  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 financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of  U.S.A.  Growth  Inc.  (a
development stage company) as of July 31, 1998 and the results of its operations
and its cash flows for the cumulative period August 14, 1987 (date of inception)
to July 31, 1998 and for the years ended July 31, 1998 and 1997,  in  conformity
with generally accepted accounting principles.




                                        ROTHSTEIN, KASS & COMPANY, P.C.


Roseland, New Jersey
October 2, 1998




                                       F-2

<PAGE>


                               U.S.A. GROWTH INC.
                          (A Development Stage Company)
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                  BALANCE SHEET
                                  July 31, 1998



                                     ASSETS

CURRENT ASSETS:
    Cash and cash equivalents                                                         $        405,455
    Income tax receivable                                                                        1,150
                                                                                      ----------------

        Total current assets                                                                              $        406,605
                                                                                                          ================



                       LIABILITY AND STOCKHOLDERS' EQUITY

CURRENT LIABILITY, accounts payable                                                                       $          4,450

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
    Common stock, par value $.001 per share,
     authorized 100,000,000 shares, issued
     11,100,000 shares                                                                $         11,100
    Capital in excess of par value                                                             723,243
    Deficit accumulated during development stage                                              (332,188)
                                                                                      ----------------
        Total stockholders' equity                                                                                 402,155

                                                                                                          $        406,605



                 See accompanying notes to financial statements.

                                       F-3

<PAGE>


                               U.S.A. GROWTH INC.
                          (A Development Stage Company)

                            STATEMENTS OF OPERATIONS



                                                                      Cumulative
                                                                    August 14, 1987
                                                                  (Date of Inception)
                                                                          to                        Year Ended July 31,   
                                                                                        ----------------------------------
                                                                    July 31, 1998                1998               1997  
                                                           -------------------------    ---------------    ---------------


INTEREST AND DIVIDEND INCOME                               $                 232,946    $        21,041    $        19,824
                                                           -------------------------    ---------------    ---------------

EXPENSES:
   Selling, general and
    administrative expenses                                                  279,296             28,399             10,563
   Expenses incurred as a result
    of rescinded investment                                                  270,734                                  -   
                                                           -------------------------    ---------------    ---------------

                                                                             550,030             28,399             10,563
                                                           -------------------------    ---------------    ---------------

INCOME (LOSS) BEFORE INCOME
 TAXES                                                                      (317,084)            (7,358)             9,261
                                                           -------------------------    ---------------    ---------------

INCOME TAXES:
   Federal                                                                     3,739
   State                                                                      11,365                                 1,161
                                                           -------------------------    ---------------    ---------------
                                                                              15,104                                 1,161
                                                           -------------------------    ---------------    ---------------

NET INCOME (LOSS)                                          $                (332,188)   $        (7,358)   $         8,100
                                                           =========================    ===============    ===============




BASIC AND DILUTED INCOME (LOSS)
 PER SHARE OF COMMON STOCK                                                              $           .00    $           .00
                                                                                        ===============    ===============


WEIGHTED AVERAGE NUMBER OF
 SHARES OF COMMON STOCK
 OUTSTANDING:

   BASIC AND DILUTED                                                                         11,045,000         10,970,000
                                                                                        ===============    ===============





                 See accompanying notes to financial statements.

                                       F-4

<PAGE>


                               U.S.A. GROWTH INC.
                          (A Development Stage Company)

                       STATEMENTS OF STOCKHOLDERS' EQUITY
                       Years Ended July 31, 1997 and 1998



                                                                                                                Deficit
                                                                                                               Accumulated
                                                                                              Capital in         During
                                                                       Common Stock            Excess of       Development
                                                             Shares            Amount          Par Value          Stage   

BALANCES, July 31, 1996                                    10,970,000    $       10,970   $      712,973   $      (332,930)

NET INCOME                                                                                                           8,100

BALANCES, July 31, 1997                                    10,970,000            10,970          712,973          (324,830)

COMMON STOCK ISSUED FOR
 SERVICES                                                     130,000               130           10,270

NET INCOME (LOSS)                                                                                                   (7,358)

BALANCES, July 31, 1998                                    11,100,000    $       11,100   $      723,243   $      (332,188)
                                                     ================    ==============   ==============   ===============



                 See accompanying notes to financial statements.

                                       F-5

<PAGE>


                               U.S.A. GROWTH INC.
                          (A Development Stage Company)

                            STATEMENTS OF CASH FLOWS




                                                                      Cumulative
                                                                    August 14, 1987
                                                                  (Date of Inception)
                                                                          to                        Year Ended July 31,   
                                                                                        ----------------------------------
                                                                    July 31, 1998                1998               1997  
                                                           -------------------------    ---------------    ---------------

CASH FLOWS FROM OPERATING
 ACTIVITIES:
   Net income (loss)                                       $                (332,188)   $        (7,358)   $         8,100
   Adjustments to reconcile net income (loss)
    to net cash provided by (used in) operating
    activities:
     Common stock issued for services                                         10,400             10,400
     Changes in assets and liabilities:
      (Increase) decrease in income tax
       receivable                                                               (929)              (150)
      Increase (decrease) in accounts payable                                  4,229              1,780                570
                                                           -------------------------    ---------------    ---------------

NET CASH PROVIDED BY (USED IN)
 OPERATING ACTIVITIES                                                       (318,488)             4,672              8,670

NET CASH PROVIDED BY FINANCING
 ACTIVITIES, net proceeds from sales of
 common stock                                                                723,943                                      

NET INCREASE IN CASH AND CASH
 EQUIVALENTS                                                                 405,455              4,672              8,670

CASH AND CASH EQUIVALENTS,
 beginning of period                                                                            400,783            392,113
                                                           -------------------------    ---------------    ---------------

CASH AND CASH EQUIVALENTS,
 end of period                                             $                 405,455    $       405,455    $       400,783
                                                           =========================    ===============    ===============



SUPPLEMENTAL DISCLOSURE OF CASH
 FLOW INFORMATION, cash paid for
 income taxes                                              $                  20,987    $           500    $           591
                                                           =========================    ===============    ===============



                 See accompanying notes to financial statements.

                                       F-6
</TABLE>

<PAGE>


                               U.S.A. GROWTH INC.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS


NOTE 1 -    NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

               Organization - The Company was incorporated on August 14, 1987 in
               the State of  Delaware,  and has  adopted a July 31 year end.  At
               July 31, 1998,  the Company is a development  stage company since
               it has not commenced meaningful  operations and does not have any
               current business ventures or plans.

               Cash and Cash  Equivalents  - The  Company  considers  all highly
               liquid  instruments  purchased with a maturity of three months or
               less to be cash equivalents.

               Income Taxes - The Company  complies with  Statement of Financial
               Accounting  Standards  No. 109,  "Accounting  for Income  Taxes",
               which  requires  an asset and  liability  approach  to  financial
               accounting for and reporting of income taxes. Deferred income tax
               assets and liabilities  are computed for differences  between the
               financial  statement and tax bases of assets and liabilities that
               will result in taxable or deductible amounts in the future, based
               on enacted tax laws and rates  applicable to the periods in which
               the differences are expected to affect taxable income.  Valuation
               allowances  are  established,   when  necessary,  to  reduce  the
               deferred income tax assets to the amount expected to be realized.

               Use of Estimates - 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.

               Income  (Loss) per Common Share - Effective  July 31,  1998,  the
               Company adopted Statement of Financial  Accounting  Standards No.
               128 (SFAS 128),  "Earnings  Per Share".  SFAS 128  requires  dual
               presentation  of basic  and  diluted  earnings  per share for all
               periods presented. Basic earnings per share excludes dilution and
               is  computed  by  dividing  income  (loss)  applicable  to common
               stockholders  by the  weighted  average  number of common  shares
               outstanding for the period.  Diluted  earnings per share reflects
               the  potential  dilution  that could occur if securities or other
               contracts to issue common stock were  exercised or converted into
               common  stock or  resulted in the  issuance of common  stock that
               then shared in the earnings of the entity.  Prior  period  income
               information  has been  restated  as  required by SFAS No. 128. At
               July 31, 1998 and 1997, the Company has unexercised  common stock
               purchase warrants to purchase 8,000,000 shares. These unexercised
               warrants were not included in the  computations of diluted income
               (loss)  per  share   because   their   effect   would  have  been
               antidilutive.


                                       F-7

<PAGE>


                               U.S.A. GROWTH INC.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS



NOTE 2 -       CASH AND CASH EQUIVALENTS:

               Cash and cash  equivalents  consist  of money  market  funds with
yields of 2-5%.

NOTE 3 -       INCOME TAXES:

               At July 31, 1998,  the Company has  available  an unused  capital
               loss  carryforward  of  $250,000  expiring  in 2005  which may be
               applied  against  future  capital gains and a net operating  loss
               carryforward of approximately  $90,000 which expires in 2008. The
               resulting  deferred  tax  asset  of  approximately  $286,800  and
               $136,000,  at July 31,  1998 and  1997,  respectively,  was fully
               reserved  because  management  considers  it more likely then not
               that the deferred tax asset will not be realized.

NOTE 4 -       RESCINDED INVESTMENT:

               On August 19,  1988,  the  Company  issued  3,500,000  restricted
               shares of its common  stock,  for all of the  outstanding  common
               stock of Factory  Outlets of America,  Inc.  (FOA) (a development
               stage company),  a franchisor of general  merchandise  stores. An
               additional  21,000,000  restricted shares of the Company's common
               stock were placed in escrow and were to be issued if FOA attained
               specified  profit levels.  In accordance with the agreement,  the
               Company contributed $250,000 to FOA's additional paid-in capital.
               FOA continued in the development  stage through February 1990, at
               which time this  agreement was rescinded and 3,080,000  shares of
               restricted stock and all of the restricted escrow shares of stock
               were  returned to the Company.  As a result of this  transaction,
               the  Company  incurred  total  expenses  of  $270,734  which  was
               comprised of acquisition  and  organization  costs of $20,734 and
               the write-off of its investment in FOA of $250,000.

NOTE 5 -       STOCKHOLDERS' EQUITY:

               On February  16, 1988,  the Company  successfully  completed  its
               public  offering.  The Company sold for $.10 per unit,  8,000,000
               units (each unit  consisting of one share of common stock and one
               Class A redeemable  common stock purchase  warrant).  One Class A
               warrant  entitles the holder to purchase,  for $.17, one share of
               common  stock  and one  Class B common  stock  purchase  warrant,
               through  December 31, 1998. The Company has reserved the right to
               redeem the unexercised warrants on thirty days written notice for
               $.001 per  warrant.  Each Class B warrant  entitles the holder to
               purchase  one  share of  common  stock at $.25 per  share  and is
               exercisable through December 31, 1998.

NOTE 6 -       CONCENTRATION OF CREDIT RISK:

               The  Company's  cash  and  cash  equivalents  are  maintained  in
               financial  institutions and, at times, exceed the Federal Deposit
               Insurance Corporation coverage of $100,000.  Management regularly
               monitors the financial condition of the financial institutions in
               order to keep the potential risk to a minimum.


                                       F-8

<PAGE>


                               U.S.A. GROWTH INC.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS



NOTE 7 -       TERMINATED MERGER:

               On July 1, 1997, the Company entered into an agreement with World
               Wide Web Casinos, Inc. (WWWC), whereby the Company and WWWC would
               merge with and into WWWC Acquisition  Corporation,  the surviving
               corporation,  in a tax free  merger.  On January 28,  1998,  WWWC
               informed  the  Company  that it was  unable  to  provide  audited
               financial   statements  which  was  one  of  the  conditions  for
               consummating  the  merger  agreement,  and  WWWC  terminated  the
               merger.

NOTE 8 -       RELATED PARTY TRANSACTION:

               On  February  2, 1998 the Company  issued  130,000  shares with a
               value of $10,400 to a related party as compensation  for services
               provided.








                                       F-9

<PAGE>



  
                                                    SIGNATURES



                  Pursuant  to the  requirements  of Section 13 or 15 (d) 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.


Dated: October 27, 1998


                                    U.S.A. GROWTH, INC.


                  --------------------------------
                   Robert Scher, President
                   and Chairman of the Board
                    of Directors


                  Pursuant to the requirements of the Securities Exchange Act of
1934,  this report has been signed below by the  following  persons on behalf of
the Registrant and in the capacities on the dates indicated.


Name                                        Titles             Date


                        President and Chairman                October 27, 1998
Robert Scher            of the Board of Directors
                        (Chief Executive Officer)


                        Director                              October 27, 1998
J. Peter Hans



<PAGE>