SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
--------------------------------------------------------------------------------


                                   FORM 10-QSB


(MARK ONE)

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

                  For the quarterly period ended March 31, 1998

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

For the transition period from ______________________ to _______________________

                                     0-20436
                             Commission file number

                       U.S. AUTOMOTIVE MANUFACTURING, INC.
        (Exact Name of Small Business Issuer as Specified in its Charter)

        Delaware                                           65-0309477 
 (State of other jurisdiction                            (IRS Employer 
of incorporation or organization)                       Identification No.)

Route 627, Airport Drive, Tappahannock, VA                    22560
(Address of principal executive offices)                    (Zip Code)

Issuer's telephone number, including area code:  (804) 443-5356

              (Former name, former address and former fiscal year,
                         if changed since last report)

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____

As of May 14, 1998,  the Registrant  had  15,724,893  shares  outstanding of its
common stock, $.001 par value.



<PAGE>



                       U.S. AUTOMOTIVE MANUFACTURING, INC.



                                      INDEX
                                                                            Page

PART I. FINANCIAL INFORMATION................................................  3

Item 1.  Consolidated Financial Statements

         Consolidated Balance Sheets at March 31, 1998
           (unaudited) and December 31, 1997 ................................  3

         Consolidated Statements of Operations (unaudited) for the
           three months ended March 31, 1998 and March 31, 1997..............  4

         Consolidated Statements of Cash Flows (unaudited) for
           the three months ended March 31, 1998 and March 31, 1997..........  5

         Notes to Consolidated Financial Statements..........................  6

Item 2.  Management's Discussion and Analysis of Financial
               Condition and Results of Operations...........................  8


PART II. OTHER INFORMATION................................................... 11

Item 6.  Exhibits and Reports on Form 8-K.................................... 11

SIGNATURES................................................................... 12



                                       -2-


<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1.       FINANCIAL STATEMENTS

                       U.S. AUTOMOTIVE MANUFACTURING, INC.

                           Consolidated Balance Sheets
                                 March 31, 1998

<TABLE>
<CAPTION>
ASSETS

                                                       March 31, 1998   December 31, 1997
                                                       --------------   -----------------
                                                         (unaudited)   
<S>                                                      <C>             <C>         
Current Assets:
    Cash                                                 $    337,338    $  1,001,843
    Accounts Receivable (net of allowance for doubtful
     accounts of $124,500 and $136,100, respectively)       2,883,175       2,800,755
    Inventories                                             8,576,860       8,739,028
    Prepaid Expense, Deferred Expense                         490,683         425,781
                                                         ------------    ------------
Total Current Assets                                       12,288,056      12,967,407

Property, plant and equipment (net of accumulated
    depreciation of $1,056,800 and $812,900,
    respectively)                                          10,445,686      10,256,556
Goodwill, net                                               6,193,916       6,273,665
                                                         ------------    ------------
TOTAL ASSETS                                             $ 28,927,658    $ 29,497,628
                                                         ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
    Line of credit                                          5,300,789       4,815,211
    Current Portion of long-term debt                       2,159,195       1,688,942
    Accounts payable                                        2,169,313       2,735,688
    Accrued liabilities                                       898,107         830,282
                                                         ------------    ------------
         Total Current Liabilities                         10,527,404      10,070,123

Long-term debt, less current portion                          189,403         242,414
Notes payable to shareholders                               4,500,000       4,500,000
                                                         ------------    ------------
         Total Liabilities                                 15,216,807      14,812,537
                                                         ------------    ------------
Stockholders Equity:
Issued & outstanding capital stock $.001 par value             15,725          15,725
Additional paid-in capital                                 38,885,545      38,885,545
Accumulated deficit                                       (25,190,419)    (24,216,179)
                                                         ------------    ------------
         Total stockholders' equity                        13,710,851      14,685,091
                                                         ------------    ------------
TOTAL LIABILITIES & STOCKHOLDER'S EQUITY                 $ 28,927,658    $ 29,497,628
                                                         ============    ============
</TABLE>


                 The accompanying notes are an integral part of
                      this consolidated financial statement

                                       -3-



<PAGE>



                       U.S. AUTOMOTIVE MANUFACTURING, INC.

                      Consolidated Statements of Operations
                                   (Unaudited)


                                                    Three Months Ended March 31,
                                                   ----------------------------
                                                      1998             1997
                                                   -----------      -----------


Net Sales                                          $ 3,419,873      $   660,846

Cost of Goods Sold                                   2,653,327          702,761
                                                   -----------      -----------

Gross Profit (Loss)                                    766,546          (41,915)
                                                   -----------      -----------

Operating Expenses:
  Selling and delivery                                 532,004          116,405
  General and administrative                           960,825          573,996
                                                   -----------      -----------

  Total Operating Expenses                           1,492,829          690,401
                                                   -----------      -----------

Operating loss                                        (726,283)        (732,316)
Interest expense                                      (247,957)        (902,757)
                                                   -----------      -----------

Net Loss                                           $  (974,240)     $(1,635,073)
                                                   ===========      ===========

Net Loss per share, basic and diluted              $     (0.06)     $     (0.19)
                                                   ===========      ===========
Weighted average shares outstanding                 15,724,893        8,898,138
                                                   ===========      ===========


                 The accompanying notes are an integral part of
                     these Consolidated Financial Statements


                                       -4-



<PAGE>



                       U.S. AUTOMOTIVE MANUFACTURING, INC.

                      Consolidated Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                         Three Months Ended March 31,
                                                         ----------------------------
                                                              1998           1997
                                                          -----------    -----------
<S>                                                       <C>            <C>         
CASH FLOW FROM OPERATING ACTIVITIES
Net Loss                                                  $  (974,240)   $(1,635,073)
                                                          -----------    -----------

Adjustments to reconcile net loss
   to net cash provided (used) by operating activities:
Depreciation                                                  243,881        160,420
Amortization                                                   79,749           --
Provision for doubtful accounts                               (11,603)          --
Increase (Decrease) In:
  Accounts Receivable                                         (70,817)      (125,995)
  Inventory                                                   162,168       (316,207)
  Prepaid Expenses                                            (64,902)     1,121,849
(Increase) Decrease In:
  Accounts Payable and Accrued Liabilities                   (498,550)        61,438
                                                          -----------    -----------


Total Adjustments                                            (160,074)       901,505
                                                          -----------    -----------

Net Cash Flows from Operating Activities                   (1,134,314)      (733,568)
                                                          -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES

Capital Expenditures                                         (433,011)          --
                                                          -----------    -----------


CASH FLOW FROM FINANCING ACTIVITIES
Net proceeds (reduction) from line of credit
   and long-term debt                                         902,820       (896,990)
Net proceeds from issuance of common stock                       --          800,000
                                                          -----------    -----------

Net Cash Flows from Financing Activities                      902,820        (96,990)
                                                          -----------    -----------

NET DECREASE IN CASH                                         (664,505)      (830,558)

CASH-beginning of period                                    1,001,843        956,548
                                                          -----------    -----------

CASH-beginning of period                                  $   337,338    $   125,990
                                                          ===========    ===========
</TABLE>




                 The accompanying notes are an integral part of
                    these consolidated financial statements.


                                       -5-

<PAGE>



                       U.S AUTOMOTIVE MANUFACTURING, INC.

                   Notes to Consolidated Financial Statements
                                 March 31, 1998
                                   (Unaudited)

NOTE 1:  BUSINESS OPERATIONS AND ORGANIZATION

     U.S. Automotive Manufacturing, Inc. (formerly RT Industries, Inc.), a
Delaware corporation incorporated on January 16, 1992, together with its
wholly-owned subsidiaries Quality Automotive Company and U.S. Automotive
Friction, Inc. (collectively, the "Company") is engaged in the manufacture,
assembly and distribution of new and rebuilt automotive friction products. The
Company maintains manufacturing and warehouse/distribution facilities in
Tappahannock, Virginia and Sanford, Florida (the "Facilities"), which Facilities
are either owned or leased by the Company or inactive subsidiaries.

     The Company manufactures a full line of friction automotive products,
including brake lining, integrally molded and riveted brake pads and
remanufactured brake shoes. The Company markets various grades of friction
lining, asbestos, non asbestos organic and semi-metallic formulas, suitable for
use by the automotive and light truck after-markets. The Company's products are
marketed under the Brakes Worth Stopping For,(R) Silent Solution,(R) Max
Life,(R) Dual Friction,(TM) Ultra Brake,(TM) Gold Max,(TM) and Quality
Automotive(TM) tradenames and various private label packaging. In 1997, the
Company's products were also sold under the Roinco,(TM) Ultra Brake(TM) and Max
Life(TM) tradenames.

     Brake pads, brake shoes or a combination of both are incorporated in all
makes and models of American and imported automobiles. All imported and the
majority of late model domestic automobiles are equipped with integrally molded
brake pads. The Company generally produces the replacement brake under the same
process used to manufacture the vehicle's original equipment.

     The Company sells its friction products to other automotive manufacturers
and the automotive after-market. The automotive after-market encompasses the
parts and service sold to the vehicle owners for repair or replacement of
original equipment parts. The Company believes that the market for replacement
parts generally consists of vehicles which are three to twelve years old. Sales
of the Company's products are made to mass merchandisers, automotive
distributors, chain stores and other brake manufacturers. The Company does not
market its products directly to retail customers.

NOTE 2:  UNAUDITED INTERIM STATEMENTS

     The accompanying unaudited consolidated financial statements of the Company
have been prepared in accordance with the instructions to Form 10 - QSB and do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (which consist only of normal recurring adjustments)
necessary for a fair presentation have been included. All significant
intercompany transactions and balances have been eliminated. Operating results
for the three months ended March 31, 1998, are not necessarily indicative of the
results to be expected for the year ending December 31, 1998. These financial
statements and notes should be read in conjunction with the financial statements
and notes thereto included in the Company's annual report on Form 10 - KSB for
the year ended December 31, 1997.


                                       -6-


<PAGE>




NOTE 3:  SIGNIFICANT ACCOUNTING POLICIES

     The Company adopted Financial Accounting Standards Board ("FASB") Statement
No. 130, "Reporting Comprehensive Income," on January 1, 1998. For the first
quarter of 1998 and 1997, total comprehensive loss equalled the net loss.


NOTE 4:  MERGER WITH QUALITY AUTOMOTIVE COMPANY

     On August 29, 1997, Quality Automotive Company was merged (the "Merger")
into a wholly owned subsidiary of the Company, which subsidiary, as the
surviving entity, changed its name to "Quality Automotive Company" ("Quality")
following the Merger and currently conducts business under such name.

     The unaudited pro forma information for the quarter ended March 31, 1997,
set forth below gives effect to the Merger as if it had occurred on January 1,
1997. The pro forma information is presented for informational purposes only and
is not necessarily indicative of the results of operations that actually would
have been achieved had the Merger been consummated on January 1, 1997, nor are
they indicative of future results of operations.

For the three months ended March 31, 1997:

Net sales                                   $3,657,805
Net loss                                    (1,995,697)
Net loss per share (basic and diluted)           (0.18)

NOTE 5:  INVENTORY

     Major inventory components as of March 31, 1998 were as follows:

Raw materials                                   $4,061,681

Work in Progress                                   163,581

Finished goods                                   4,351,598
                                                ----------
                                                $8,576,860
                                                ==========

Note 6:  DEBT

     The Company obtained additional financing during the first quarter of 1998
through the private placement of debt and equity instruments on February 27,
1998 to an affiliate and a director of the Company, respectively. The sale was
made pursuant to a private placement consisting of two (2) unsecured
non-negotiable promissory notes in the aggregate principal amount of $400,000,
bearing interest at the rate of 10.5% per annum, and warrants to purchase up to
an aggregate of 100,000 shares of the Common Stock, maturing in February 2003,
at a conversion price equal to $2.00 per share subject to adjustment in certain
conditions. The net proceeds to the Company were approximately $370,000. The
warrants are redeemable by the Company, upon notice of not less than 30 days at
a price of $0.05 per warrant, provided that the closing bid quotation of the
Common Stock on all 20 trading days ending on the third day prior to the day of
which the Company gives notice of redemption has been at least 150% of the then
effective exercise price of the warrants. The holders of the Warrants shall have
the right to exercise them until the close of business on the date fixed for
redemption. The exercise price and number of shares of Common Stock or other
securities issuable on exercise of the warrants are subject to adjustment in
certain circumstances, including in the event of a stock dividend,
recapitalization, reorganization, merger or consolidation of the Company.

     The Company also entered into a revolving credit facility on March 31,
1998, pursuant to which up to $2.0 million was made available to the Company
(the "USAM Revolving Loan"). At May 15, 1998, an aggregate of $1.05 million had
been advanced to the Company under such USAM Revolving Loan. Advances pursuant
to the USAM Revolving Loan bear interest at the rate of 11% per annum and are to
be repaid by the Company, together with accrued interest thereon, at the
expiration of 2 years, unless earlier prepaid, at the option of the Company. The
USAM Revolving Loan is secured by a general security interest in the assets of
the Company as well as a first security interest in and to the Company's Florida
production facility. Under the terms the USAM Revoling Loan, the Company shall
grant to the lender five year warrants to purchase up to 420,000 shares of the
Company's Common Stock, provided the monies advanced to the Company under the
USAM Revolving Loan remain outstanding for the full two-year term of the USAM
Revolving Loan. Prepayment by the Company results in a reduction of the total
aggregate warrants to be granted by the Company. Such warrants shall generally
be exercisable any time after March 31, 1999, at an exercise price equal to
eighty percent (80%) of the average closing sales price for the Common Stock for
the twenty (20) trading days preceding such exercise date. The Company has
agreed to grant the lender or its assigns "piggyback" registration rights with
respect to the shares underlying such warrants.


                                      -7-


<PAGE>



ITEM 2:      MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain information included in this
Report contains statements that are forward-looking, such as statements relating
to plans for future activities. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among others, the
following: the Company's recent losses, the Company's need to obtain additional
financing and the ability to obtain such financing, outstanding indebtedness,
the ability to hire and retain key personnel; successful completion and
integration of prior and any future acquisitions; relationships with and
dependence on third-party equipment manufacturers and suppliers; uncertainties
relating to business and economic conditions in markets in which the Company
operates; uncertainties relating to government and regulatory policies and other
political risks; uncertainties relating to customer plans and commitments; cost
of and availability of component materials and inventories; effect of
governmental export and import policies; the highly competitive environment in
which the Company operates; potential entry of new, well-capitalized competitors
into the Company's markets; and the uncertainty regarding the Company's
continued ability, through sales growth, to absorb the increasing costs incurred
and expected to be incurred in connection with its business activities. The
words "believe", "expect", "anticipate", "intend" and "plan" and similar
expressions identify forward-looking statements. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date the statement was made.

Results of Operations

Comparison of Three Months Ended March 31, 1998 to Three Months Ended March 31,
1997

     Net Sales. Net sales for the three months ended March 31, 1998 were
$3,419,873 as compared to net sales of $660,846 for the three months ended March
31, 1997. The increase of $2,759,027 or 417% resulted from the addition of sales
generated by Quality (approximately $2.8 million).

     Gross Profit (Loss). For the three months ended March 31, 1998, the Company
had a gross profit of $766,546 compared to the gross loss of ($41,915) for the
three months ended March 31, 1997. The increase in gross profit was attributed
to a 417% increase in sales offset by a 277% increase in the overall cost of
sales, each attributable to the acquisition of Quality. Cost of sales for the
three months ended March 31, 1998 was $2,653,327 as compared to $702,761 for the
three months ended March 31, 1997.

     Selling, General and Administrative Expenses. Selling, general and
administration expenses for the three months ended March 31, 1998 were
$1,492,829 as compared to $690,401 for the three months ended March 31, 1997,
representing an increase of 116%. The $802,428 increase in total operating
expense was comprised of (i) a $415,599 increase in selling and delivery expense
(from $116,405 in the first quarter of 1997 to $532,004 in the first quarter of
1998) resulting from the Merger and (ii) a $386,829 increase in the general and
administrative expenses caused predominately by the inclusion of Quality's
selling, general and administrative expenses offset by a reduction in the
overhead attributable to the Company's Florida facilities, resulting from the
Merger.

     Interest Expense. Other income and expense decreased by $654,800 from
$902,757 in the first quarter of 1997 to $247,957 in the first quarter of 1998.
This decrease was predominately

                                       -8-


<PAGE>



attributable to a decrease in the principal amount of convertible debentures
outstanding in 1988.

     Net Income (Loss). The net loss in the first quarter of 1998 was ($974,240)
or ($.06) per share based on 15,724,893 weighted average common and common
equivalent shares outstanding compared to a net loss of ($1,635,073) or ($.19)
per share in the first quarter of 1997 based on 8,898,138 common and common
equivalent shares outstanding. The decrease in net loss of $660,833 was
primarily the result of the decrease in interest expense.

Liquidity and Capital Resources

     During the three months ended March 31, 1998, the Company financed its
operations primarily through net proceeds from the Company's private sales of
equity and debt securities, borrowings under its lending facilities and cash
generated by operations.

     At March 31, 1998, the Company had consolidated cash and short-term
investments totalling $337,338 and working capital of $1,760,652. At March 31,
1997, the Company had consolidated cash and short-term investments totalling
$4,575,990 and working capital of $3,361,578. This decrease in working capital
was due primarily to the Merger.

     Net cash provided by financing activities for first quarter 1998 was
$902,820, consisting primarily of the proceeds of a private placement of debt,
aggregating $400,000, completed by the Company pursuant to Regulation D under
the Securities Act of 1933 as amended (the "Act") and initial advances to the
Company under the $2.0 million USAM Revolving Loan. Proceeds from such Offerings
were used to fund on-going operations and to replace cash depleted through
losses by the Company and to purchase the Company's Sanford, Florida production
facility.

     Prior to April 1997, the Company had a $7.5 million secured line of credit
with Congress Financial Corporation. Such line of credit matured in April 1997,
at which time the Company did not renew the credit line.

     After the Merger, a principal source of capital for the Company's
operations has been the line of credit (the "Credit Facility") between Quality
and LaSalle Business Credit, Inc. ("LaSalle"), which Credit Facility matured on
March 31, 1998 and is presently on due on a "demand" basis. The Credit Facility
consists of the following:

     (i)  a secured revolving credit facility of up to $7.5 million. Advances
          are made by formula on the Company's accounts receivable and
          inventory. At March 31, 1998, the revolving credit had approximately
          $5.3 million of a possible $5.883 million outstanding. Interest is
          calculated at the prime rate plus 1% (9.5% at March 31, 1998)

     (ii) a secured loan covering machinery equipment, property and plant having
          an original loan amount of approximately $3,500,000 of which $750,000
          was outstanding at March 31, 1998. Monthly installments of $50,000 are
          due until maturity, at which time any balance owing is due. Interest
          is calculated at the prime are plus 1% (9.5% at March 31, 1998)

     (iii) a secured loan covering machinery and equipment put into service
          under a capital expenditure facility of 1995. The original amount
          outstanding was approximately

                                       -9-

<PAGE>



          $1,000,000. At March 31, 1998, the balance outstanding was
          approximately $510,000. The loan calls for monthly payments of $31,000
          with any balance being due at the maturity date. Interest is
          calculated at the prime rate plus 1% (9.5% at March 31, 1998).

     Quality's obligation to pay the principal of, interest on, premium, if any,
and all other amounts payable on account of the Credit Facility is secured by
substantially all of the assets of Quality as well as the pledge of all of the
Company's ownership interest in Quality.

     Upon the maturity of the Credit Facility on March 31, 1998, Quality
requested that LaSalle extend the Credit Facility for one year as well as grant
a new $2.0 million capital expenditure finance facility (carrying an 85% advance
rate against new equipment purchased (acquired after June 1997), with interest
and maturity date consistent with other fixed asset financing, except that there
will be no amortization of principal during the first 12 months of the
facility). LaSalle has advised the Company of its willingness to grant such
request, subject to satisfactory documentation. The Company believes that such
arrangement will be finalized during the second quarter of 1998. Until such time
as documentation of the loan extension and additional loan is executed, all of
the Company's indebtedness to LaSalle is due on demand.

     In addition to the Credit Facility, the Company obtained additional
financing during the first quarter of 1998 through the private placement of debt
and equity instruments on February 27, 1998 to an affiliate and a director of
the Company, respectively. The sale was made pursuant to a private placement
consisting of two (2) unsecured non-negotiable promissory notes in the aggregate
principal amount of $400,000, bearing interest at the rate of 10.5% per annum,
and warrants to purchase up to an aggregate of 100,000 shares of the Common
Stock, maturing in February 2003, at a conversion price equal to $2.00 per share
subject to adjustment in certain conditions. The net proceeds to the Company
were approximately $370,000. The warrants are redeemable by the Company, upon
notice of not less than 30 days at a price of $0.05 per warrant, provided that
the closing bid quotation of the Common Stock on all 20 trading days ending on
the third day prior to the day of which the Company gives notice of redemption
has been at least 150% of the then effective exercise price of the warrants. The
holders of the Warrants shall have the right to exercise them until the close of
business on the date fixed for redemption. The exercise price and number of
shares of Common Stock or other securities issuable on exercise of the warrants
are subject to adjustment in certain circumstances, including in the event of a
stock dividend, recapitalization, reorganization, merger or consolidation of the
Company.

     The Company entered into the USAM Revolving Loan on March 31, 1998,
pursuant to which up to $2.0 million was made available to the Company. At May
15, 1998, an aggregate of $1.05 million had been advanced to the Company under
such USAM Revolving Loan. Advances pursuant to the USAM Revolving Loan bear
interest at the rate of 11% per annum and are to be repaid by the Company,
together with accrued interest thereon, at the expiration of 2 years, unless
earlier prepaid, at the option of the Company. The USAM Revolving Loan is
secured by a general security interest in the assets of the Company as well as a
first security interest in and to the Company's Florida production facility.
Under the terms of the USAM Revolving Loan, the Company agreed to grant to the
lender five year warrants to purchase up to 420,000 shares of the Company's
Common Stock, provided the monies advanced to the Company at May 1, 1998 under
the USAM Revolving Loan remain outstanding for the full two-year term of the
USAM Revolving Loan. Prepayment by the Company results in a reduction of the
total aggregate warrants to be granted by the Company. Such warrants shall
generally be exercisable any time after March 31, 1999, at an exercise price
equal to eighty percent (80%) of the average closing sales price for the Common
Stock for the twenty (20) trading days preceding such exercise date. The Company
has agreed to grant the lender or its assigns "piggyback" registration rights
with respect to the shares underlying such warrants.


                                      -10-


<PAGE>



PART II: OTHER INFORMATION

ITEM 2:  CHANGES IN SECURITIES AND USE OF PROCEEDS

     On February 27, 1998, the Company sold debt and equity securities to an
affiliate and a director of the Company pursuant to the exemption from the
registration requirements under the Act afforded by Regulation D of the Act (the
"Offering"). Net proceeds to the Company from the Offering were approximately
$370,000.

     The Offering consisted of (i) debt instruments, in the form of unsecured
non-negotiable promissory notes, in the aggregate principal amount of $400,000,
bearing interest at 10.5% per annum and (ii) five year warrants to purchase up
to 100,000 shares of the Company's Common Stock, at an exercise price equal to
$2.00 per share. (The exercise price and number of shares of Common Stock
issuable on exercise of the warrants are subject to adjustment in certain
circumstances, including in the event of a stock dividend, recapitalization,
reorganization, merger or consolidation of the Company). Such warrants are
immediately exercisable. The Company may, upon notice of not less than 30 days,
redeem such warrants at a price of $0.05 per warrant, provided that the closing
bid quotation of the Company's Common Stock on all 20 trading days ending on the
third day prior to the day of which the Company gives notice of redemption has
been at least 150% of the then effective exercise price of the warrants. The
holders of the Warrants shall have the right to exercise them until the close of
business on the date fixed for redemption.

     On March 31, 1998, the Company granted five year warrants to purchase up to
105,000 shares of its Common Stock pursuant to the terms of a $2.0 million
revolving loan agreement entered into by the Company on such date. Such warrants
are exercisable upon the one year anniversary of their issuance, at an exercise
price of eighty percent (80%) of the average closing sales price for the Common
Stock for the twenty (20) trading days preceeding such one year anniversary. By
the terms of the revolving loan agreement, the Company could grant additional
warrants, exercisable to purchase up to an aggregate of 315,000 additional
shares of the Company's Common Stock, provided the monies advanced pursuant to
such revolving loan agreement remain outstanding for the full two-year term of
the loan.

     The Company has granted "piggyback" registration rights with respect to the
shares underlying the warrants issued pursuant to the February 1998 Offering and
the revolving loan agreement.

ITEM 6:  EXHIBITS AND REPORTS ON FORM 8-K

                  (a)      Exhibits

                           Exhibit 27 Financial Data Schedule

                  (b)      Form 8-K

                           None.


                                      -11-


<PAGE>





                                   SIGNATURES

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


Dated:   May 15, 1998

                                  U.S. AUTOMOTIVE MANUFACTURING, INC.


                                  By:   /s/ John W. Kohut
                                        ---------------------------------
                                           John W. Kohut,
                                           Chairman of the Board
                                           and Principal Financial Officer


                                      -12-