U.S. SECURITIES AND EXCHANGE COMMISSION
                      WASHINGTON, D.C. 20549


                          Form 10-QSB

                     Quarterly Report Under
               the Securities Exchange Act of 1934

              For Quarter Ended:  February 28, 1999

                  Commission File Number:  0-26920



                       USAsurance Group, Inc.
 (Exact name of small business issuer as specified in its charter)


                              Colorado
    (State or other jurisdiction of incorporation or organization)

                             84-1298212
                  (IRS Employer Identification No.)

                         7345 E. Peakview Ave.
                          Englewood, Colorado
                (Address of principal executive offices)

                                80111
                             (Zip Code)

                           (303) 689-0123
                     (Issuer's Telephone Number)



Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter  period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days:
Yes __X__ No _____.

The number of shares of the  registrant's  only class of common stock issued and
outstanding, as of February 28, 1999, was 2,216,000 shares.



<PAGE>



                              PART I

ITEM 1.   FINANCIAL STATEMENTS.

      The  unaudited  financial  statements  for the  nine  month  period  ended
February 28, 1999, are attached hereto.

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

     The following  discussion  should be read in conjunction with the Financial
Statements and notes thereto included herein. In connection with, and because it
desires  to take  advantage  of, the "safe  harbor"  provisions  of the  Private
Securities Litigation Reform Act of 1995, the Company cautions readers regarding
certain forward looking statements in the following  discussion and elsewhere in
this report and in any other statement made by, or on the behalf of the Company,
whether or not in future filings with the  Securities  and Exchange  Commission.
Forward  looking  statements are statements not based on historical  information
and which relate to future  operations,  strategies,  financial results or other
developments.  Forward looking  statements are necessarily  based upon estimates
and assumptions that are inherently  subject to significant  business,  economic
and competitive  uncertainties and  contingencies,  many of which are beyond the
Company's control and many of which, with respect to future business  decisions,
are subject to change.  These  uncertainties and contingencies can affect actual
results and could cause actual results to differ materially from those expressed
in any forward  looking  statements  made by, or on behalf of, the Company.  The
Company disclaims any obligation to update forward looking statements.

Introduction

     Through  the fiscal  year ended May,  1997,  the Company was engaged in the
business of  investing  in the viatical  settlement  industry by acquiring  life
insurance  policies from  individuals or pools of policies from other companies.
During the fiscal year ended May 31, 1997, the industry  changed due to advances
in  medication  that  prolongs  life for these  individuals  and the Company has
ceased  further  participation  in the viatical  settlement  business due to the
extended life expectancies resulting in lower returns. Subsequently,  management
began to seek,  investigate  and, if such  investigation  warranted,  acquire an
interest in business  opportunities  presented  to it by persons or firms who or
which desire to seek the  perceived  advantages  of an Exchange  Act  registered
corporation.  Applicable  thereto,  effective  February 16,  1999,  the Company,
through a recently formed wholly owned subsidiary,  Akahi Corp.  ("Akahi"),  did
enter into an Ownership Purchase Agreement (the "Agreement"),  wherein Akahi did
agree to acquire all of the member interests in and to 2Xtreme Performance

                                        2

<PAGE>



International  L.L.C.,  a Delaware  limited  liability  company ("2X" or the "2x
Acquisition").  2X was a multifaceted network marketing company based in Dallas,
Texas,  which offers five  categories of health,  wellness and beauty  products,
including  products  related to general  health,  fitness,  personal care,  body
cleansing and weight management. All of its products are organically grown, wild
harvested  and cold  processed.  It  markets  its  products  through  television
"infomercial" advertising and print media, as well as through its 100,000 member
associates/distributors.  It commenced its business in March 1996 and during its
most recent fiscal year,  generated  approximately  $40,000,000  in revenues and
earned a profit from such operations.  The Company's  current plan of operations
related to this acquisition of assets is discussed in detail hereinbelow.

Results of Operations

Comparison  of Results of Operations  for the nine month periods ended  February
28, 1999 and 1998.

     The Company had no revenues for the nine month periods  ended  February 28,
1999 and February 28,  1998.  In the nine month period ended  February 28, 1999,
general and administrative expenses decreased $25,948 (45%) from $57,710 for the
nine month period  ended  February  28, 1998 to $31,762.  This  decrease was due
primarily to reduction of overhead,  which eliminated  approximately  $23,000 in
officer  compensation  during the  applicable  period,  as well as a significant
decrease  in costs  associated  with  professional  services,  rent  and  office
supplies. The Company incurred a net loss of $(31,762) for the nine month period
ended February 28, 1999, compared to a net loss of $(57,710) for the nine months
ended  February 28, 1998, a decrease of $25,948,  or 45%,  primarily  due to the
matters described above.

     Since June 1995, the Company purchased,  for its own account,  10 different
insurance  policies  with a face  value of  $538,294  from  individuals,  for an
aggregate  purchase  price of $489,795.  Five of these policies have matured and
net aggregate  proceeds from these  policies in the total amount of $75,903 have
been paid to the  Company,  one of which  matured  during the nine months  ended
February 28, 1998, with the Company receiving  approximately $27,000 as a result
of such  maturity,  the proceeds of such matured policy having  previously  been
recognized  as income on an  accrual  basis.  Because  the  Company's  Financial
Statements are prepared on an accrual rather than a cash basis,  this income was
accounted  for in the quarter ended May 31, 1997.  None of the policies  matured
during the nine month period ended  February  28, 1999.  The Company  recognizes
income (earned  discount) on each purchased policy by accruing,  over the period
between the acquisition  date of the policy and the Company's  estimated date of
collection of the face value of the policy (the accrual period),  the difference
(the unearned discount) between (a) the death benefit payable (face

                                        3

<PAGE>



value  under the policy less the amount of fees,  if any,  payable to a referral
source upon  collection  of the face value;  and (b) the  carrying  value of the
policy.  The carrying value of each policy is reflected on the Company's balance
sheet under  "purchased  life  insurance  policies" and consists of the purchase
price,  other  capitalized cost and the earned discount on the policy accrued to
the balance sheet date. The Company  capitalizes as incurred the following costs
of a purchased policy:  (i) the purchase price paid for the policy;  (ii) policy
premiums,  if any, paid by the Company;  (iii) amounts, if any, paid to referral
sources  upon  acquisition  of the  policy;  and (iv)  amounts  paid to retained
physicians  or other  medical  consultants  who  estimated  the  insured's  life
expectancy.  The  carrying  value of a policy  change  over time and is adjusted
quarterly to reflect the earned  discounts  accrued on the policy,  amounts paid
for any additional future increases in coverage, any additional premium payments
and any  premium  refunds  if the  policy  becomes  covered  by  premium  waiver
provisions.  The length of the accrual period is determined by the Company based
upon its  estimate  of the date on which it will  collect  the face value of the
policy. Such date is based upon the Company's estimate of the life expectancy of
the insured, after review of the medical records of the insured by the Company's
medical consultants,  and also takes into account the historical accuracy of the
life expectancies  estimated by the Company's consultants and the typical period
(collection  period)  between  the date of the  insured's  death and the date on
which the Company collects the face value of the policy.

     The unearned discount is accrued over the accrual period using the straight
line method.  Under the straight  line method,  the unearned  discount is earned
evenly  throughout  the accrual  period and the unearned  discount will be fully
accrued as earned discount by the end of the accrual period.

     Any  change  in  accrual  periods  will not cause a  restatement  of earned
discounts in prior periods but will impact  earned  discounts in the current and
future  periods on  policies  owned by the Company  (by either  accelerating  or
decelerating the recognition of remaining unearned discount). The Company cannot
predict how any accrual period will change, if at all, in the future.

Comparison of Results of Operations  for the Three Month Periods Ended  February
28, 1998 and 1997.

     The Company had no revenues for the three month periods ended  February 28,
1999 and 1998.  In the three month period ended  February 28, 1999,  general and
administrative  expenses decreased $6,771 (63%) from $10,601 for the three month
period ended February 28, 1998 to $3,830. This decrease was primarily due to the
factors  cited above for the results of  operations  for the nine month  periods
ended february 28, 1999 and 1998.


                                        4

<PAGE>



     The  Company  incurred a net loss of $(7,401)  for the three  month  period
ended  February  28,  1999,  compared to a net loss of  $(12,393)  for the three
months ended February 28, 1998, a decrease of $(4,992), or 40%, primarily due to
the reasons also described above.

Plan of Operation

         As of the date of this  report,  the  Company's  principal  business is
operated through its two wholly owned  subsidiaries,  Akahi Corp. and Akahi.com,
Inc. The assets acquired from 2X, described hereinabove,  were acquired by Akahi
Corp.  Akahi  (which  means "the number  one" in  Hawaiian).com  specializes  in
developing,   marketing  and  selling  cutting-edge  nutritional  and  high-tech
products through a vast direct sales network (i.e.,  network marketing).  In the
three  years of prior  operations  by  previous  ownership,  this  business  has
developed to one which generates over $40 million a year in annual revenues.

         As a result of the acquisition,  the Company's infrastructure presently
includes   over   100,000   distributors   from  all  50  states.   It  utilizes
state-of-the-art computer systems that can place and process over 300,000 orders
each week and maintains an Internet presence which is growing rapidly.

         The past and  sustained  future  growth of the  Company is found in its
unique business strategy:  To harness four fast-growing facets of operations and
synergistically  turn them  into one  united  profit  center.  These  operations
include:

         -        Natural Health Products.  Management believes that this market
                  is one of  America's  premiere  markets for current and future
                  growth.  According to the Nutrition  Business  Journal  Annual
                  Industry  Overview,  sales for nutritional  products were $6.5
                  billion a year in 1996,  with an annual growth rate of 15% per
                  annum over the last four year period  recorded.  According  to
                  the aforesaid  Journal,  75 million Americans report they take
                  or have tried  nutritional  supplements,  and the  numbers are
                  growing  every day. When you consider  sales for  prescription
                  drugs are over $100  billion a year - and more and more people
                  are trying natural alternatives - management believes that the
                  growth  potential of the natural health  products  industry is
                  staggering.

         -        High Tech Products.  Of all the markets studied by the
                  Company, the high-tech market is at or near the top in
                  terms of explosive growth potential.  The U.S. Department
                  of Commerce estimates that the Internet doubles in size
                  every 100 days.  According to Business Week, CEO's expect
                  to generate almost 40% of annual sales via the Internet
                  within 10 years.  It is anticipated that this market will

                                        5

<PAGE>



                  grow  significantly in the near future,  as more people become
                  owners of computers and access the Internet.

         -        Direct Marketing.  Direct marketing has been the most powerful
                  and most targeted  form of marketing  ever  invented.  In 1998
                  alone, it is estimated that direct marketing  resulted in over
                  $160 billion in sales all across America.

         -        Network  Marketing.   Akahi.com,  Inc.,  a  Texas  corporation
                  handles the Company's network marketing activities. Management
                  believes that no marketing  area has grown faster than network
                  marketing. According to associations that track growth, direct
                  selling (of which  network  marketing is a  significant  part)
                  grew by more  than 60% in the  most  recent  six  year  period
                  studied.  More  importantly,  more than $80  billion  worth of
                  products and services were sold through this form of marketing
                  in the most recent year studied.

         The  Company   plans  for  growth  by  focusing  on  two  major  areas:
health/wellness/nutrition  and  high-tech  fields.  Within those two areas,  the
Company has, and will continue to (i) develop and sell proprietary  products and
services,  and (ii)  create  opportunities  for  individuals  to build their own
home-based  businesses to generate  additional income. When these two objectives
are met,  management believes that Akahi.com will be able to enhance the health,
wealth and personal  success of its customers,  as well as its  distributors and
employees.

         What management believes sets the Company apart from other companies of
its type is its unique Direct-Net(TM)  marketing strategy.  This strategy brings
together the four facets of operations  mentioned above into a proven successful
highly  effective  system.   Direct-Net   overcomes  the  biggest  problem  that
management believes typically stifles the growth of network marketing companies:
most people are not natural  salespeople.  They hate selling or are afraid to go
out and sell  products or  services.  Direct-Net  provides the system that "does
most  of  the   selling"   for   distributors.   This   includes   ready-to-use,
professionally-created   direct   marketing   promotions   and   business   kits
distributors  can purchase and use to build their own  businesses.  For example,
instead of trying to write their own sales  letters,  distributors  can purchase
sales letters that have been tested and proven to generate response.

Liquidity and Capital Resources

     The Company's prior primary need for capital has been the funding of policy
purchases.  Prior to the 2X  Acquisition,  the Company  relied upon the proceeds
from the sale of common stock of $329,448  derived  from a private  offering and
loans from related

                                        6

<PAGE>



parties of $175,340.  During the nine month period ended  February 28, 1998, the
Company  financed its  operations  from cash flow  generated  from a outstanding
receivable  derived from the maturity of one life insurance policy in the amount
of $27,000.  As a result of the 2x  Acquisition,  the  Company's  cash  position
increased dramatically. As of February 28, 1999, the Company had a cash position
of $1,455,051  (including  $1,123,000 of restricted cash), compared to $2,003 at
the end of February 1998.

         The  relevant  terms of the 2X  Acquisition  provide for the Company to
tender a total  purchase  price of $4.5  million.  Of this  purchase  price,  $1
million has been already  tendered.  The Company obtained these funds by selling
an aggregate of 650,000  shares of its " restricted"  common stock for aggregate
proceeds of $65,000  ($.10 per share).  The balance was  provided by the Company
obtaining a loan in the amount of $935,000 from  Consolidated  Capital,  Inc., a
nonaffiliate of the Company.  The principal balance accrued interest at the rate
of 10.5% per annum and all  principal and interest as accrued is due and payable
one year from the date of the note.  It is  secured  by all of the assets of the
Company.

         The  balance  of $3.5  million  is due  pursuant  to the  terms  of two
promissory  notes,  including one note in the principal  amount of $3.1 million,
with the other in the  principal  amount of  $400,000  (the  "Notes").  The $3.1
million Note is secured by a Security Agreement,  Financing Statements, a Pledge
Agreement, and Guaranties.  Terms of the $3.1 million Note provide for repayment
at an  interest  rate of the Prime Rate as  announced  daily in The Wall  Street
Journal  with a balloon  payment  to be paid 120 days  after the  Closing  Date.
Failure to pay off this Loan in full within such 120-day  period shall cause the
Loan interest rate to be increased to the Prime Rate plus 1% as announced  daily
by The Wall Street Journal.  In the event the Company fails to pay off this Loan
in full  within  210 days  after the  Closing  Date,  it has the option to buy a
month-to-month  extension at the cost of Fifty Thousand Dollars ($50,000.00) per
month to be paid monthly, on the first of each month, to the Sellers in addition
to the balloon  principal amounts owed and accruing interest as described above.
Failure to make the full balloon  payment of principal  and interest  within one
(1) year after the Closing Date or to timely make any of the extension  payments
shall  permit  Sellers,  at their  option,  to exercise any and all remedies set
forth in the applicable Loan documents.

         The  $400,000  Note,  which is payable to the  principal  member of 2X,
accrues interest at a rate consistent with the $3.1 million Note described above
and is due and payable in eleven (11) installments of $30,000 of principal each,
plus  accrued  interest  on the  unpaid  principal  balance  to the date of each
installment  payment,  commencing on the 1st day of April 1999 and continuing on
the same day of each and every consecutive month thereafter through

                                        7

<PAGE>



and including the 1st day of February,  2000, plus one final  installment of the
entire unpaid principal and accrued interest on or before February 16, 2001.

         Relevant to the Company's prior viatical settlement  business,  in June
1995,  Terry  Whiteside,  the Company's  former President loaned the Company the
principal  sum of $42,340,  which the Company  utilized to purchase  its initial
insurance  policy with a face value of $58,000.  In August 1995,  Ms.  Whiteside
loaned the Company the principal sum of $58,000.  Additionally in August 1995, a
minority  shareholder  of the Company  loaned the Company the  principal  sum of
$75,000.  Each of these aforesaid loans are unsecured and all have been extended
until August 1999 by the mutual consent of the parties,  with interest  accruing
at the rate of 7% per annum. The Company utilized the proceeds of these loans to
purchase insurance policies.

     The Company's  common stock shares are currently  traded on the NASDAQ over
the counter Bulletin Board using the trading symbol "UASG".

Year 2000 Disclosure

         Many existing  computer programs use only two digits to identify a year
in  the  date  field.   These  programs  were  designed  and  developed  without
considering the impact of the upcoming change in the century.  If not corrected,
many computer  applications  could fail or create erroneous results by or at the
Year 2000.  As a result,  many  companies  will be required to  undertake  major
projects  to  address  the  Year  2000  issue.  As a  result  of the  recent  2X
Acquisition,  management  has recently  begun a review of the Company's  current
computer  systems  and as of the  date of  this  report,  it  appears  that  the
Company's computer systems are not Y2K compliant. In order to make the Company's
computer  system  compliant,  the Company will need to upgrade the two databases
utilized by the Company,  including Foxpro 2.6, which runs the Genesis database,
which is required for all  invoices  and is the main company  database and is of
particular  concern  to  management,  and  Telemagic.  It is  expected  that the
upgrades to  Telemagic  will be minor.  The Company is  presently  contemplating
purchasing  the latest  version of Foxpro,  rather than attempt to upgrade.  The
Company  also  utilizes  Mas90  accounting  software.   Mas90  claims  that  the
acquisition  of  upgrades  will  make  this  software  Y2K  compliant.   From  a
preliminary analysis provided by outside  consultants,  management believes that
it will cost approximately  $250,000 to bring the current system compliant.  The
Company has commenced the process  necessary to bring the system into conformity
with all Y2K issues and it is anticipated  that this will be accomplished by the
end of calendar 1999.

The Company  believes  that the potential  impact,  if any, of these systems not
being Y2K compliant will, at most, require employees to

                                        8

<PAGE>



manually  complete  otherwise  automated tasks or calculations and it should not
impact the Company's ability to continue its sales activities.  The Company will
be initiating formal  communications  with its significant  suppliers,  business
associates  and  customers  to  determine  the  extent to which the  Company  is
vulnerable to those third parties failure to correct their own Year 2000 issues.
There can be no guarantee, however, that the systems of other companies on which
the  Company's  systems  rely will be  timely  converted,  or that a failure  to
convert  by another  company,  or a  conversion  that is  incompatible  with the
Company's systems would not have a material adverse effect on the Company.

The Company  has  determined  it has  limited or no  exposure  to  contingencies
related to the Year 2000 issue with respect to products  sold to third  parties.
The Company will utilize both internal and external  resources to complete tasks
and perform testing necessary to address the Year 2000 issue.

                         PART II.  OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS - None

ITEM 2.     CHANGES IN SECURITIES - NONE

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES - NONE

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -
            NONE.

ITEM 5.     OTHER INFORMATION - NONE.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            (a)  Exhibits
                 EX-27     Financial Data Schedule

            (b)  Reports on Form 8-K

         On February 18, 1999, the Company filed a report on Form 8-K,  advising
of the 2X Acquisition described herein. The contents of this Form 8-K are hereby
incorporated by referenced as if set forth.



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USAsurance Group, Inc.
Consolidated Balance Sheet
-----------------------------------------------------------------
                                           Unaudited    Audited
                                            February      May
                                            28, 1999    31, 1998
                                           ----------  ---------
ASSETS
Current Assets:
Cash                                       $1,455,051  $   2,003
Inventory                                   1,635,646          0
Other Current Assets                          464,412          0
                                           ----------  ---------
Total Current Assets                        3,555,109      2,003
                                           ----------  ---------
Property and Equipment                      1,565,775      3,890
  Less Accumulated Depreciation                (2,089)    (1,558)
                                           ----------  ---------
Net Property and Equipment                  1,563,686      2,332
                                           ----------  ---------
Other Assets
Goodwill                                    3,894,578          0
Other Assets                                  491,663    407,776
                                           ----------  ---------
Total Other Assets                          4,386,241    407,776
                                           ----------  ---------
TOTAL ASSETS                               $9,505,036  $ 412,111
                                           ==========  =========

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Current Liabilities:
Current Portion of Long-Term Debt          $   81,653          0
Accounts Payable                            1,870,669     18,703
Other Current Liabilities                   2,471,391     14,608
                                           ----------  ---------
Total Current Liabilities                   4,423,713     33,311
                                           ----------  ---------
Long-Term Debt - Related Party                111,840    103,340
Long-Term Debt - Other                        361,364     75,000
Long-Term Debt - Acquisition                3,835,000          0
                                           ----------  ---------
Total Long-Term Debt                        4,308,204    178,340
                                           ----------  ---------
TOTAL LIABILITIES                           8,731,917    211,651
                                           ----------  ---------
SHAREHOLDERS' EQUITY

Other Shareholder Equity                    1,068,548    401,748

Retained Earnings (Deficit)                  (295,429)  (201,288)
                                           ----------  ---------
TOTAL SHAREHOLDERS' EQUITY                    773,119    200,460
                                           ----------  ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $9,505,036  $ 412,111
                                           ==========  =========
     The Accompanying Notes Are An Integral Part Of These Unaudited
Financial Statements.

                                       10

<PAGE>



USAsurance Group, Inc.
Unaudited Consolidated Statement Of Operations
-----------------------------------------------------------------
                                        Unaudited     Unaudited
                                         3 Month       3 Month
                            Period Ended Period Ended
                                         February      February
                                         28, 1999      28, 1998
                                       ------------  ------------
Income:                                $          0  $          0

General & Administrative Expenses:

Compensation - Officers                         600         8,250
Depreciation                                    177           177
Legal And Accounting                          2,645         1,674
Professional Services                             0             0
Rent                                              0           500
Stock Transfer                                  408             0
Telephone                                         0             0
Travel                                            0             0
                                       ------------  ------------
Total                                         3,830        10,601
                                       ------------  ------------
Net (Loss) Before Other Income               (3,830)      (10,601)
                                       ============  ============

Other Income (Expense)

Interest Income                                   0           829
Other Income                                      0           500
Interest Expense                             (3,571)       (3,121)
                                       ------------  ------------
Total Other Income (Expense)                 (3,571)       (1,792)
                                       ------------  ------------
Net (Loss)                             $     (7,401) $    (12,393)
                                       ============  ============

Basic & Diluted (Loss)
  Per Common Share                           ($0.00)       ($0.01)
                                       ============  ============

Weighted Average Common Shares
  Outstanding                             1,674,333     1,566,000
                                       ============  ============

     The Accompanying Notes Are An Integral Part Of These Unaudited
Financial Statements.


                                       11

<PAGE>



USAsurance Group, Inc.
Unaudited Consolidated Statement Of Operations
-----------------------------------------------------------------
                                        Unaudited     Unaudited
                                         9 Month       9 Month
                                       Period Ended Period Ended
                                         February      February
                                         28, 1999      28, 1998
                                       ------------  ------------
Income:                                $          0  $          0

General & Administrative Expenses:

Compensation - Officers                       1,800        24,750
Depreciation                                    531           531
Legal And Accounting                         28,838        13,610
Office                                            6         5,739
Professional Services                             0         7,500
Rent                                              0         1,538
Stock Transfer                                  587             0
Telephone                                         0         1,566
Travel                                            0         2,476
                                       ------------  ------------
Total                                        31,762        57,710
                                       ------------  ------------
Net (Loss) Before Other Income              (31,762)      (57,710)
                                       ============  ============

Other Income (Expense)

Interest Income                                   0         1,329
Other Income                                      0           500
Interest Expense                            (10,613)       (9,258)
                                       ------------  ------------
Total Other Income (Expense)                (10,613)       (7,429)
                                       ------------  ------------
Net (Loss)                             $    (42,375) $    (65,139)
                                       ============  ============

Basic (Loss) Per Common Share                ($0.03)       ($0.04)
                                       ============  ============

Weighted Average Common Shares
  Outstanding                             1,601,714     1,566,000
                                       ============  ============

     The Accompanying Notes Are An Integral Part Of These Unaudited
Financial Statements.

                                       12

<PAGE>



USAsurance Group, Inc.
Consolidated Statement Of Cash Flows
-----------------------------------------------------------------
                                        Unaudited     Unaudited
                                         9 Month       9 Month
                                        Period Ended Period Ended
                                         February      February
                                         28, 1999      28, 1998
                                       ------------  ------------
Net (Loss)                             $    (42,375) $    (65,139)

Adjustments To Reconcile Net Loss
  To Net Cash Used In Operating
  Activities:
Depreciation                                    531           531
Contributed Services And Rent                 1,800        26,250

Changes In Operating Assets
  And Liabilities:
(Increase) Decrease In Receivable                 0        27,000
(Increase) in Interest Receivable                 0        (1,250)
(Increase) In Purchased Life
  Insurance Policies                              0          (776)
Decrease In Deposits
  With Insurance Companies                        0        38,476
Increase In Accounts Payable                  9,935         5,075
Increase In Interest Payable                 10,613         2,258
                                       ------------  ------------
  Net Flows From Operations                 (19,496)       32,425

Cash Flows From Investing Activities:
Purchase of Business                     (1,000,000)            0
                                       ------------  ------------
  Net Cash Flows From Investing          (1,000,000)            0
                                       ------------  ------------
Cash Flows From Financing Activities:
Loans Made To Other Parties                       0       (50,000)
Funds Received From Loans                    17,991        22,000
Payments Made on Loans                            0        (4,000)
Common Stock                                 65,000             0
Cash From Acquisition                     1,454,553             0
Funds Borrowed for Acquisition
  of Assets                                 935,000             0
                                       ------------  ------------
  Cash Flows From Financing               2,472,544       (32,000)
                                       ------------  ------------
Net Increase In Cash                      1,453,048           425
Cash At Beginning Of Period                   2,003           729
                                       ------------  ------------
Cash At End Of Period                  $  1,455,051  $      1,154
                                       ============  ============
Summary Of Non-Cash Investing
  And Financing Activities:
Reclass Trade Payable to Note Payable  $      9,491  $          0
                                       ============  ============
Note Payable for Purchase of Business  $  3,500,000
                                       ============
      The Accompanying Notes Are An Integral Part Of These Unaudited
Financial Statements.

                                       13

<PAGE>



USAsurance Group, Inc.
Notes To Unaudited Financial Statements
For The Nine Month Period Ended February 28, 1999
-------------------------------------------------

Note 1 - Unaudited Financial Information
----------------------------------------

The unaudited financial  information included for the three month and nine month
interim  periods  ended  February 28, 1999 and February 28, 1998 were taken from
the books and records  without audit.  However,  such  information  reflects all
adjustments  (consisting only of normal recurring adjustments,  which are of the
opinion of  management,  necessary  to reflect  properly  the results of interim
periods  presented).  The results of operations  for the nine month period ended
February 28, 1999 are not necessarily indicative of the results expected for the
fiscal year ended May 31, 1999.

Note 2 - Acquisition of Assets
------------------------------

On February 16, 1999,  the Company  entered into an agreement to purchase all of
the assets  and assume the  liabilities  related  to such  assets  from  2Xtreme
Performance  International LLC ("2Xtreme"),  a Texas limited liability  company.
2Xtreme is a direct  response  marketing  business  with a networking  marketing
component dealing in vitamins and dietary supplements.

The assets were paid for by Akahi Corp., a newly created wholly owned subsidiary
of the  Company.  Akahi paid  $1,000,000  to the seller at closing,  $935,000 of
which was  borrowed  and  $65,000  of which was  generated  through  the sale of
650,000 shares of the Company's  common stock. The balance of the purchase price
($4.6 million) is due pursuant to two promissory notes, one for $3.1 million and
one in the principal amount of $400,000.

The acquisition has been accounted for as a purchase and for accounting purposes
will be considered  effective  February 29, 1999. The operations of 2Xtreme will
be consolidated with those of the Company beginning March 1, 1999.

Note 3 - Pro Forma Financial Information
----------------------------------------

The following  pro forma  financial  information  is presented as if 2Xtreme had
been acquired at the beginning of the respective periods:



                                       14

<PAGE>



                                 3 Months Ended                  9 Months Ended
                                  Feb. 28, 1999                   Feb. 28, 1999
                                  ------------                     ------------
Revenues                           $  9,554,939                   $ 31,775,743
Net Income (Loss)                       277,352                       (143,449)
Net Income (Loss) Per Share                 .17                           (.09)

                                       15

<PAGE>



                                   SIGNATURES


           Pursuant  to the  requirements  of Section 12 of the  Securities  and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                   USAsurance Group, Inc.
                                   (Registrant)

                                   Dated:  April 19, 1999


                                   By:/s Peter L. Hirsch 
                                      ----------------------
                                   Peter L. Hirsch, President



                                       16

<PAGE>


                             USAsurance Group, Inc.

                EXHIBIT INDEX TO QUARTERLY REPORT ON FORM 10-QSB
                     FOR THE QUARTER ENDED FEBRUARY 28, 1999

EXHIBITS                                                 Page No.

  EX-27     Financial Data Schedule . . . . . . . . . . . . . 18



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