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 September 30, 2000

[_]  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  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 [ ]

As of December 1, 2000, the Registrant had 1,329,492  shares  outstanding of its
common stock, $.001 par value.

Transitional Small Business Disclosure Format (check one):

                             Yes [ ]     No [X]
<PAGE>


                       U.S. AUTOMOTIVE MANUFACTURING, INC.

                                      INDEX

                                                                            PAGE
                                                                            ----
PART I. FINANCIAL INFORMATION................................................  3

Item 1.  Consolidated Financial Statements

         Consolidated Balance Sheets at September 30, 2000 (unaudited)
            and December 31, 1999............................................  3

         Consolidated Statements of Operations (unaudited) for the
            three months ended September 30, 2000 and September 30, 1999.....  4

         Consolidated Statements of Operations (unaudited) for the
            nine months ended September 30, 2000 and September 30, 1999......  5

         Consolidated Statements of Cash Flows (unaudited) for
            the nine months ended September 30, 2000 and September 30, 1999..  6

         Notes to Consolidated Financial Statements..........................  7

Item 2.  Management's Discussion and Analysis or Plan
              of  Operation.................................................. 11

PART II. OTHER INFORMATION  ................................................. 15

Item 5.  Other Information  ................................................. 15

Item 6.  Exhibits and Reports on Form 8-K.................................... 16


SIGNATURES................................................................... 17

                                       2
<PAGE>


                                     PART I
                              FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                       U.S. AUTOMOTIVE MANUFACTURING, INC.

                           CONSOLIDATED BALANCE SHEETS
                               SEPTEMBER 30, 2000

                                                    SEPTEMBER 30,   DECEMBER 31,
                                                         2000          1999
                                                     -----------    -----------
                                                     (UNAUDITED)
ASSETS
Current Assets:
    Cash .........................................   $    25,128    $   151,685
    Accounts receivable (net of allowance of
        $162,000 and $73,000 respectively) .......     3,598,640      3,531,487
    Inventories ..................................     8,470,714      8,745,814
    Prepaid expenses and other ...................       19,124.         27,978
                                                     -----------    -----------
        Total Current Assets .....................    12,113,606     12,456,964
Property, plant and equipment
  (net of accumulated depreciation of
  $803,693 and $2,708,450 respectively) ..........     3,371,131     10,965,687
Fixed Assets Held For Sale .......................       873,149              .
Deferred financing costs .........................             .        397,989
Goodwill, net ....................................             .      5,635,673
                                                     -----------    -----------
TOTAL ASSETS .....................................   $16,357,886    $29,456,313
                                                     ===========    ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
    Line of credit ...............................     7,960,284      7,220,713
    Current portion of long-term debt ............     3,900,103      4,299,657
    Secured promissory loan ......................     1,420,000              .
    Accounts payable .............................     4,128,502      3,518,527
    Accrued liabilities ..........................     2,010,747      1,549,969
                                                     -----------    -----------

        Total Current Liabilities ................    19,419,636     16,588,866
Long-term debt, less current portion .............       103,370        124,079
Notes payable to shareholders ....................     5,610,000      5,340,000
                                                     -----------    -----------
        Total Liabilities ........................    25,133,006     22,052,945
                                                     -----------    -----------
Stockholders' Equity:
Issued & outstanding capital stock
  $.001 par value ................................         1,329          1,268
Additional paid-in capital .......................    39,314,596     39,252,927
Accumulated deficit ..............................   (48,091,045)   (31,850,827)
                                                     -----------    -----------
        Total stockholders' equity (deficit) .....    (8,775,120)     7,403,368
                                                     -----------    -----------
TOTAL LIABILITIES & STOCKHOLDERS'
  EQUITY (DEFICIT) ...............................   $16,357,886    $29,456,313
                                                     ===========    ===========

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

                                       3
<PAGE>


                       U.S. AUTOMOTIVE MANUFACTURING, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                                        THREE MONTHS ENDED
                                                           SEPTEMBER 30,
                                                    ---------------------------
                                                        2000           1999
                                                    ------------    -----------
Net sales .......................................   $  4,114,011    $ 5,661,471
Cost of goods sold ..............................      3,381,458      4,422,023
                                                    ------------    -----------
Gross profit ....................................        732,553      1,239,448
                                                    ------------    -----------
Operating expenses:
    Selling and delivery ........................        658,699        769,050
    General and administrative ..................        798,967        933,498
    Asset Impairment ............................                    11,621,053
                                                    ------------    -----------
    Total operating expenses ....................     13,078,719      1,702,548
                                                    ------------    -----------
Operating loss ..................................    (12,346,166)      (463,100)
Interest expense ................................       (612,957)      (499,219)
                                                    ------------    -----------
Net loss ........................................   $(12,959,123)   $  (962,319)
                                                    ============    ===========
Net loss per share, basic and diluted ...........   $      (9.75)   $     (0.86)
                                                    ============    ===========
Weighted average shares outstanding .............      1,329,492      1,124,168
                                                    ============    ===========

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

                                       4
<PAGE>


                       U.S. AUTOMOTIVE MANUFACTURING, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                                         NINE MONTHS ENDED
                                                           SEPTEMBER 30,
                                                    ---------------------------
                                                        2000           1999
                                                    ------------    -----------
Net sales .......................................   $ 14,414,917    $21,025,787
Cost of goods sold ..............................     12,456,026     15,642,114
                                                    ------------    -----------
Gross profit ....................................      1,958,891      5,383,673
                                                    ------------    -----------
Operating expenses:
    Selling and delivery ........................      2,135,033      2,303,709
    General and administrative ..................      2,780,254      2,611,238
    Asset Impairment ............................     11,621,053              .
                                                    ------------    -----------
    Total operating expenses ....................     16,536,340      4,914,947
                                                    ------------    -----------
Operating (loss) income .........................    (14,577,449)       468,726
Interest expense ................................     (1,662,769)    (1,513,220)
                                                    ------------    -----------
Net loss ........................................   $(16,240,218)   $(1,044,494)
                                                    ============    ===========
Net loss per share, basic and diluted ...........   $     (12.34)   $     (0.96)
                                                    ============    ===========
Weighted average shares outstanding .............      1,315,702      1,086,069
                                                    ============    ===========

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

                                       5
<PAGE>


                       U.S. AUTOMOTIVE MANUFACTURING, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                                                         NINE MONTHS ENDED
                                                            SEPTEMBER 30,
                                                    ---------------------------
                                                         2000           1999
                                                    ------------    -----------
CASH FLOW FROM OPERATING ACTIVITIES
Net Loss ........................................   $(16,240,218)   $(1,044,494)
Adjustments to reconcile net loss
  to net cash used in operating activities:
    Depreciation and Amortization ...............      1,375,273      1,146,457
    Asset Impairment ............................     11,621,053             --
    Rollover of accrued interest into
      shareholder note ..........................        270,000        270,000
    Issuance of common stock in satisfaction
      of related party
    Payables ....................................             --         49,166
    (Increase) decrease in:
         Accounts receivable ....................        (67,152)        18,518
         Inventory ..............................        275,101       (314,338)
         Prepaid expenses and other .............          8,854       (252,231)
    Increase in:
         Accounts payable and accrued liabilities      1,095,338         97,186
                                                    ------------    -----------
Total adjustments ...............................     14,578,467      1,014,758
                                                    ------------    -----------
Net cash used in operating activities ...........     (1,661,751)       (29,736)
CASH FLOWS FROM INVESTING ACTIVITIES
    Capital expenditures ........................       (241,257)      (892,922)
                                                    ------------    -----------
CASH FLOW FROM FINANCING ACTIVITIES
    Net borrowings on lines of credit,
      notes payable, and secured
    Promissory loans ............................      1,776,451        828,731
                                                    ------------    -----------
NET DECREASE IN CASH ............................       (126,557)       (93,927)
CASH-beginning of period ........................        151,685        338,641
                                                    ------------    -----------
CASH-end of period ..............................   $     25,128    $   244,714
                                                    ============    ===========


Supplemental Cash Flow Information:
  Non-cash financing and investing activities:
    Conversion of convertible debentures
      and accrued interest payable into
      common stock ..............................   $     49,230    $        --
    Directors fees converted into common stock ..   $     12,500    $    36,666

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

                                       6
<PAGE>


                       U.S AUTOMOTIVE MANUFACTURING, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2000
                                   (UNAUDITED)


NOTE 1: BUSINESS OPERATIONS AND ORGANIZATION

     U.S. Automotive Manufacturing, 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  a  manufacturing  and
warehouse/distribution facility in Tappahannock, Virginia.

     The  Company  manufactures  a full line of  automotive  friction  products,
including   brake  lining,   integrally   molded  and  riveted  brake  pads  and
remanufactured brake shoes. The Company markets various grades of friction brake
lining,  using  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)  Gold Max,(R) Dual  Friction,(TM)  Ultra Brake,(TM)  Ustop,(TM) and
Quality Automotive(TM)  tradenames and various private label packaging. In 1999,
the Company's  products were also sold under the  Roinco,(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 that 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 AND ASSET IMPAIRMENT

     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 nine months ended September 30, 2000, are not necessarily  indicative of
the  results  to be  expected  for the year  ending  December  31,  2000.  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, 1999.

     The  Company has  experienced  lower than  expected  sales  resulting  from
reduced customer orders and other industry wide factors. The lower than expected
sales are  anticipated  to continue  through the end of the year. In response to
the lower sales, the Company has reduced staff and closed its  manufacturing and
warehouse facilities in Sanford, Florida.

     The Company is currently not generating sufficient revenues from operations
to fund its operating activities and is dependent upon additional financing from
external sources.

                                       7
<PAGE>


     Previously the Company  reported that on May 9, 2000, it had entered into a
non-binding  letter of understanding with an investor with respect to a proposed
strategic   investment  in  the  Company.   In  connection  with  that  proposed
investment,  the investor has provided a secured  promissory loan to the Company
in the aggregate  principal  amount of $1,420,000.  The investor has advised the
Company  that the  strategic  investment  will  not be made as a  result  of the
Company's being delisted on October 19, 2000.  However,  the Company is still in
negotiations with the strategic investor and another investor to structure a new
deal in the form of an asset purchase. The Company,  therefore, has no available
sources of additional  financing.  If the Company is unable to secure financing,
on an immediate basis, through a strategic investment or otherwise,  the Company
may be required to cease operations.

     The Company has been advised by its  independent  public  accountants  that
unless the Company raises  adequate  capital through  additional  financing or a
strategic  investment  prior to the  completion  of the  audit of the  Company's
financial statements for the year ending December 31, 2000, the auditors' report
on those financial statements will be modified to reflect this contingency.  The
accompanying  financial statements do not include any adjustments to reflect the
possible future effects on the  recoverability  of assets and  classification of
liabilities that would result from the inability of the Company to continue as a
going concern.

Asset Impairment

     In the third quarter of 2000,  after  considering the Company's  history of
operating losses and the expectation of future operating losses,  changes in the
Company's  strategic  direction,  and  certain  industry  factors,  the  Company
evaluated the ongoing value of its business.  Based on this  evaluation  and the
proposed strategic investor's decision not to make a strategic investment in the
Company in accordance with the original  proposal,  the Company  determined that
assets with a carrying  value of  $15,517,000  were  impaired  according  to the
provisions of SFAS No. 121,  "Accounting for the Impairment of Long-Lived Assets
and for  Long-Lived  Asset to be Disposed Of", and wrote down the carrying value
of such assets by $11,621,000  to their fair value.  Fair value was based on the
recent appraisals, if available, and expected future cash flows. The Company has
also classified the fixed assets at its Sanford Florida facility as fixed assets
held for sale on the accompanying  balance sheet. Fair value of the fixed assets
held for sale is based on anticipated sales prices.

     The  Company's  estimates  of the fair value of the assets could be reduced
significantly  in the future  due to the  results  of its  discussions  to raise
capital and changes in market  conditions.  As a result,  the carrying amount of
long-lived assets could be further reduced materially in the future.


NOTE 3: INVENTORY

     Major inventory components were as follows:

                                                    SEPTEMBER 30,  DECEMBER 31,
                                                        2000           1999
                                                     ----------     ----------
                                                     (UNAUDITED)
Raw materials ..................................     $3,617,724     $4,027,616
Work in Process ................................        142,240         80,904
Finished goods .................................      4,710,750      4,637,294
                                                     ----------     ----------
                                                     $8,470,714     $8,745,814
                                                     ==========     ==========
NOTE 4: DEBT

CREDIT AGREEMENT

     The Company entered into a $15,000,000  credit agreement with IBJ Whitehall
Business Credit Corporation (the "IBJ Credit Facility") as of July 30, 1999. The
IBJ Credit  Facility  consists of a revolving  loan, a term loan,  and a

                                       8
<PAGE>


capital  expenditures loan. The IBJ Credit Facility terminates on July 30, 2002,
unless earlier terminated, as provided for in the credit agreement.

     The  revolving  loan  (the  "IBJ  Revolving  Loan")  commitment  amount  is
$12,000,000, subject to certain limitations.  Advances are made by formula based
upon the Company's accounts receivable and inventory  balances.  As of September
30, 2000, a total of approximately  $7,960,284,  of a possible  $8,350,783,  was
outstanding  under the IBJ Revolving  Loan and was included in line of credit in
the accompanying  balance sheets.  Interest is calculated at the prime rate plus
 .75% (10.25% at September 30, 2000). The IBJ Revolving Loan is collateralized by
the accounts  receivable  and inventory of the Company.  Under the IBJ Revolving
Loan,  the  Company  is  required  to  maintain  a  lockbox.  Proceeds  from the
collection of accounts  receivable are required to be remitted  directly to this
lockbox,  which is controlled by IBJ Whitehall Business Credit  Corporation.  As
such,  the  balance  of the IBJ  Revolving  Loan is  reflected  as a  short-term
liability in the Company's financial statements.  The short-term  classification
does not effect the  Company's  ability to draw  additional  advances  under the
credit agreement according to the established formula.

     The term  loan  (the  "IBJ  Term  Loan")  has an  original  loan  amount of
approximately  $2,108,000  and is secured by machinery  and  equipment.  Monthly
installments  of $36,459  are due until  maturity,  at which time the  remaining
outstanding  balance is due. As of September 30, 2000,  the balance  outstanding
was approximately  $1,634,042.  Interest is calculated at the prime rate plus 1%
(10.5% at September 30, 2000).

     The capital expenditures loan (the "CapEx Loan") is a secured loan covering
machinery and equipment put into service under a capital expenditure facility of
1999.  The CapEx Loan allows for the  financing of up to  $1,000,000  of capital
expenditures  from  May 1,  1999 at an  advance  rate of 80% of the  cost of the
equipment.  As of September 30, 2000, the balance  outstanding was approximately
$195,839. The CapEx Loan requires monthly payments of 1/72 of each advance, with
any remaining balance due at maturity.  Interest is calculated at the prime rate
plus 1% (10.5% at September 30, 2000).

     The IBJ Credit  Facility  contains  covenants  that  restrict the Company's
ability to declare cash  dividends  and require the Company to maintain  certain
financial  ratios such as fixed  charge  coverage  and a minimum net worth.  The
Company  was  and  continues  to be in  non-compliance  with  certain  financial
covenants  under the IBJ Credit  Facility.  Until such time as the Company is no
longer in compliance  with the financial  covenants  contained in the IBJ Credit
Facility  or the IBJ  Credit  Facility  is  amended  in a  manner  to cure  such
non-compliance,  IBJ  could  accelerate  the  maturity  date of the  IBJ  Credit
Facility.  Such  acceleration  of the maturity  date of the IBJ Credit  Facility
would have a material adverse effect on the Company.

CONVERTIBLE DEBENTURES

     In 1998, the Company obtained  additional  financing through the sale of 8%
Redeemable  Convertible  Debentures (the "Reg S  Debentures"),  in the aggregate
principal  amount  of  $2,250,000.  The  Reg S  Debentures  represent  unsecured
obligations  of the Company and must be converted  into shares (the  "Conversion
Shares") of the  Company's  common stock at maturity  date  (December 31, 2000),
unless  they have been  converted  earlier  at the  option  of the  holder.  The
conversion  price of the Reg S  Debentures  will be equal to 80  percent  of the
average  closing bid price of the shares of common stock as quoted on the Nasdaq
SmallCap  Market for the five trading  days  immediately  preceding  the date of
conversion. Notwithstanding the foregoing, the Company is not obligated to issue
more than 209,660  Conversion Shares (the "Maximum  Conversion Share Allotment")
without stockholder approval.

     The Reg S  Debentures  bear  interest at 8% per annum  (subject to increase
under certain circumstances), payable upon conversion or redemption of the Reg S
Debentures.  Commencing  January 1, 1999, the interest rate increased to 20% per
annum because the underlying  Conversion Shares were not registered with the SEC
before  January 1, 1999.  At such time as the  underlying  shares are  tradable,
without  regard to  registration,  the  interest  rate will revert to the 8% per
annum.  Further,  if upon  conversion of the Reg S Debentures  the Company would
otherwise  be required to issue  shares of common stock in excess of the Maximum
Conversion  Share  Allotment,  the interest  rate on the Reg S Debentures  will,
effective as of the issuance of the Maximum Conversion Share Allotment, increase
to 25% per annum with respect to the unconverted  Reg S Debentures.  The Company
has agreed that if it has not either retired

                                       9
<PAGE>


the remaining Reg S Debentures  with accrued but unpaid interest within ten days
of the  issuance  of the Maximum  Conversion  Share  Allotment  or filed a proxy
statement soliciting  stockholder  authorization to issue additional shares upon
notice of  conversion of  outstanding  Reg S Debentures in excess of the Maximum
Conversion  Share  Allotment  and/or  in  lieu of such  cash  redemption  of the
remaining  Reg S  Debentures,  the  Company  would  pay a  penalty  equal to the
difference between the interest rate paid since inception and 25% on those Reg S
Debentures  which remain  outstanding  after the  issuance of the Maximum  Share
Allotment.  Such penalty will not be  applicable if the Company files such proxy
as contemplated.

     The Company may redeem the Reg S Debentures at any time, upon 30 days prior
written notice as to redemptions  made, or upon three days notice for redemption
pursuant to (ii) below (a "Redemption  Notice"),  at a redemption price equal to
(i) 125% of the  principal  amount  of,  plus  accrued  interest  on,  the Reg S
Debentures,  or (ii) 100% of the principal  amount of, plus accrued interest on,
the Reg S Debentures in the event that the Company shall have issued the Maximum
Conversion  Share  Allotment.  In  addition,  if the  Company  redeems the Reg S
Debentures  any time after the Company has issued the Maximum  Conversion  Share
Allotment,  the  Company  has also  agreed to issue to the  holders of the Reg S
Debentures to be redeemed a number of warrants (the "Redemption Warrants") equal
to one-half of the principal  amount of the Reg S Debentures to be redeemed.  If
issued,  the Redemption  Warrants will be exercisable for a period of five years
from the date of issuance  at an exercise  price equal to either (i) the greater
of (A) $15.00 per share; (B) 115% of the average of the closing bid price of the
Common Stock for the five trading days immediately preceding the Redemption Date
or (ii) in the event that an exercise price under  alternative (i) is determined
by Nasdaq to be an  issuance  below the then  current  market  price  within the
meaning of NASD Rule  4310(c)(25)(H) (or any successor rule), the exercise price
will be equal to the closing bid price of the common  stock on June 30, 1998 and
the number of Warrant Shares  issuable will be subject to adjustment as provided
in the Redemption Warrant. The Redemption  Warrants,  if any, will be redeemable
by the  Company  upon  notice of not less  than 30 days,  at a price of $.05 per
Redemption  Warrant  but only to the  extent  that the  shares of  common  stock
underlying  the  Redemption  Warrants  are  transferable  either  pursuant to an
effective  registration  statement or pursuant to Rule 144 of the Securities Act
of 1933,  as amended  (the  "Securities  Act") and the  closing bid price of the
common stock on all 15 trading days ending on the day on which the Company gives
notice  has  been at  least  150% of the then  effective  exercise  price of the
Redemption  Warrants.  If issued,  the  Redemption  Warrants will be exercisable
either  on  a  cash  or  cashless  basis  and  the  holders  will  have  certain
registration  rights with  respect to the shares of common stock  issuable  upon
exercise of the Redemption Warrants.

     On May 3, 2000 the holders of Reg S Debentures  each delivered a conversion
notice to the Company requesting the conversion of an aggregate principal amount
of $90,000,  and accrued but unpaid interest thereon into approximately  192,948
shares of the Company's Common Stock at an average conversion price, pursuant to
the conversion  rate set forth in the Reg S Debentures,  of $.61 per share.  The
Company  issued an  aggregate  of 3,336  shares to the  converting  holders on a
pro-rata  basis of 1,112 to each such  holder.  Such  shares  in the  aggregate,
represented the remaining shares available for issuance by the Company under the
Maximum Conversion  Allotment.  The Company has likewise notified the holders of
the Reg S Debentures that the Company has contemporaneously with the issuance of
the 3,336 shares  reached the Maximum Share  Allotment.  In accordance  with the
terms of the Reg S Debentures,  the Company filed a preliminary  proxy statement
to solicit shareholder authorization for the issuance of shares in excess of the
Maximum  Conversion  Allotment  pursuant to further  conversion  requests by the
holders of the balance of the Reg S Debentures.

     As of September 30, 2000 an aggregate of $230,760 principal amount of Reg S
Debentures  plus  accrued  but  unpaid  interest  thereon  of  $41,514  had been
converted  into  209,660  shares of the  Company's  Common  Stock at an  average
conversion price of $1.255 per share.

     Subsequent to the Company's filing of the preliminary proxy statement,  the
Company  proceeded with negotiations  with a prospective  strategic  investor in
connection with an equity  investment by the strategic  investor in the Company.
The transaction  contemplated the simultaneous conversion of the outstanding Reg
S Debentures  into a certain  percentage  of the Company's  common  stock.  As a
result  of the  continuing  negotiations,  the  Company  was  unable  to  file a
definitive proxy statement until such time as a formal  agreement  regarding the
strategic  investment was entered into. The strategic  investment as negotiated,
however,  was  conditioned,  among other things,  upon the continued  listing of
Company's  common  stock on the Nasdaq Small Cap market.  Effective  October 19,
2000,  by a

                                       10
<PAGE>


decision of a Nasdaq listing  Qualifications  Panel,  the Company's common stock
was delisted from the Nasdaq Small Cap market.  Subsequent to such delisting all
discussions relating to the originally proposed strategic investment have ceased
entirely.  As of December 1, 2000 the Company has not filed a  definitive  proxy
statement.  By letter  dated  December 5, 2000,  the holders of Reg S Debentures
notified the Company that they  declared the Company to be in default  under the
terms of the Reg S Debentures and demanded an  accelerated  payment of principal
and interest on the  outstanding  Reg S  Debentures.  The Company has  initiated
discussions in an effort to resolve this matter.

SECURED LOAN

     Prior to the  termination of  discussions  with the  prospective  strategic
investor  with respect to the  originally  proposed  strategic  investment,  the
Company had entered into a secured loan with the prospective  strategic investor
for an aggregate principal amount of $1,420,000 (the "Secured Promissory Loan").
The Secured  Promissory  Loan was primarily for  $1,000,000 of cash received and
approximately  $347,000  related  to the  conversion  of  certain  payables  for
inventory.  The Company  recorded  interest expense in the third quarter of 2000
for the difference between the face value of the Secured Promissory Loan and the
value of the cash received and payables  converted.  The cash proceeds have been
applied  towards  the  reduction  of  amounts  outstanding  under the IBJ Credit
Facility. The Secured Promissory Loan accrues interest at an annual rate of 10%.
The interest rate may be increased to 13% in the event of a default. The Secured
Promissory Loan is due on October 30, 2002. The Secured Promissory Loan has been
classified as current as it contains a covenant  that requires  repayment in the
event that the Company fails to pay certain indebtness, which would likely occur
if any of the  Company's  debt that is  currently  in non  compliance  with debt
covenants  was  accelerated.  The  Secured  Promissory  Loan is  secured  by the
Company's real estate and operating office and warehouse facilities.

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 and its ability to continue as a going
concern,  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  ability to  continue as a going
concern as well as it 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 statements were made.

GENERAL

     In the quarter ended June 30, 1999 the Company achieved its first quarterly
profit in more than five years. Based on these and other factors,  at the end of
the June 30, 1999 quarter,  management anticipated continued revenue growth and,
consequently,  the  Company was hiring and  training  additional  employees  and
incurring  overtime  expenses  in order to keep  production  in line  with  such
anticipated growth.  However,  during the third and fourth quarters of 1999, the
Company experienced an unforeseen substantial decrease in orders from two of its
largest  customers.  Moreover,  business  from a potential new customer that was
expected to occur in the third quarter of 1999

                                       11
<PAGE>


never  materialized.  As a result,  the Company was required to reduce  overhead
expenses,  which was partially accomplished through reductions in personnel from
475 at June 30, 1999 to 269 at December 31, 1999.

     The downturn of the third and fourth  quarters of 1999  reversed  itself in
late December  1999  primarily as a result of  accelerated  orders from existing
customers. The Company ended the year with a substantial backlog of orders. This
trend  continued  during the first quarter of year 2000 primarily as a result of
the  Company's  two largest  customers  more than  doubling the normal amount of
orders they typically  place during this period.  As a result of the increase in
orders  the  Company  was forced to hire and train a  substantial  amount of new
employees,  which  had a  material  adverse  effect on the  Company's  operating
results.  Moreover, in the last half of April 2000, the Company was advised that
both of its  largest  customers  had an  oversupply  of  inventory  and would be
cutting back orders.  As a result,  the Company was again required to reduce the
number of its full-time employees.

     Previously the Company  reported that on May 9, 2000, it had entered into a
non-binding  letter of understanding  with a strategic  investor.  In connection
with that proposed  investment,  the prospective investor had loaned the Company
an aggregate  principal amount of $1,420,000.  A pre-condition to such strategic
investor's  investment  in the  Company  had been the  continued  listing of the
Company's  Common  Stock or the Nasdaq  Small Cap market.  As  described  below,
effective October 19, 2000 the Company's Common Stock has been delisted from the
Nasdaq Small Cap market and has  commenced  trading on the OTC  Bulletin  Board.
Subsequent  to  such  delisting,  all  discussions  relating  to the  originally
propossed strategic investment have ceased entirely.  Consequently,  the Company
has no  sources  of  available  financing.  If the  Company  is unable to secure
financing on an immediate basis, through a strategic  investment,  or otherwise,
the Company may be required to cease operations.

RESULTS OF OPERATIONS

COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 2000 TO THREE MONTHS ENDED
SEPTEMBER 30, 1999

     NET SALES.  Net sales for the three  months ended  September  30, 2000 were
$4,114,011  as compared to net sales of  $5,661,471  for the three  months ended
September  30,  1999.   The  decrease  of  $1,547,460  or  27.3%  was  primarily
attributable to a reduction of orders from customers.

     GROSS PROFIT.  For the three months ended  September 30, 2000,  the Company
had a gross profit of $732,553  compared to a gross profit of $1,239,448 for the
three  months  ended  September  30,  1999.  The  decrease  in gross  profit was
primarily  attributable  to the  decrease  in  sales.  Cost of  goods  sold as a
percentage of net sales for the three months ended  September 30, 2000 was 82.2%
as compared to 78.1% for the three  months ended  September  30, 1999 because of
increase in utility expenses and manufacturing overhead.

     SELLING,  GENERAL  AND  ADMINISTRATIVE   EXPENSES.   Selling,  general  and
administrative  expenses  for the three  months  ended  September  30, 2000 were
$1,457,666  as compared to $1,702,548  for the three months ended  September 30,
1999,  representing a decrease of 14.4%. The decrease was primarily attributable
to the closing of the Company's Sanford, Florida facility.

     ASSET IMPAIRMENT.  During the third quarter of 2000 the Company recorded an
asset impairment charge of $11,621,053.  See Note: 2 under Notes to Consolidated
Financial Statements.

     INTEREST  EXPENSE.  Interest  expense  increased  by $113,738 or 22.8% from
$499,219 for the three months ended September 30, 1999 to $612,957 for the three
months ended September 30, 2000. The increase in interest  expense  reflected an
increase in borrowing by the Company.

     NET  LOSS.  Net loss in the  third  quarter  of 2000 was  ($12,959,123)  or
($9.75) per share based on 1,329,492  weighted average common shares outstanding
compared to a net loss of ($962,319) or ($.86) per share in the third quarter of
1999 based on 1,124,168  weighted  average common and common  equivalent  shares
outstanding.  The increase in net loss of $375,751 was  primarily  the result of
reduced sales and write down of assets.

COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 2000 TO NINE MONTHS ENDED
SEPTEMBER 30, 1999

                                       12
<PAGE>


     NET SALES.  Net sales for the nine  months  ended  September  30, 2000 were
$14,414,917  as compared to net sales of  $21,025,787  for the nine months ended
September  30,  1999.   The  decrease  of  $6,610,870  or  31.4%  was  primarily
attributable to a reduction of orders from customers.

     GROSS PROFIT. For the nine months ended September 30, 2000, the Company had
a gross profit of $1,958,891  compared to a gross profit of  $5,383,673  for the
nine months ended September 30, 1999. The decrease in gross profit was primarily
attributable to the decrease in sales. Cost of goods sold as a percentage of net
sales for the nine  months  ended  September  30,  2000 was 86.4% as compared to
74.4% for the nine months ended September 30, 1999.

     SELLING,  GENERAL  AND  ADMINISTRATIVE   EXPENSES.   Selling,  general  and
administrative  expenses  for the nine  months  ended  September  30,  2000 were
relatively unchanged at $4,915,287 as compared to $4,914,947 for the nine months
ended September 30, 1999.

     ASSET IMPAIRMENT.  During the third quarter of 2000 the Company recorded an
asset impairment charge of $11,621,053.  See Note: 2 under Notes to Consolidated
Financial Statements.

     INTEREST  EXPENSE.  Interest  expense  increased  by  $149,549 or 9.9% from
$1,513,220  for the nine months ended  September 30, 1999 to $1,662,769  for the
nine months ended September 30, 2000. The increase in interest expense reflected
the increase in borrowing.

     NET LOSS.  Net loss in the first nine months of 2000 was  ($16,240,218)  or
($12.34) per share based on 1,315,702 weighted average common shares outstanding
compared  to a net loss of  ($1,044,494)  or ($.96)  per share in the first nine
months of 1999 based on 1,086,069  weighted average common and common equivalent
shares  outstanding.  The increase in net loss of  $3,574,671  was primarily the
result of reduced sales and write down of assets.

LIQUIDITY AND CAPITAL RESOURCES

     During the nine months ended  September 30, 2000, the Company  financed its
operations  primarily through  borrowings under its lending  facilities and cash
generated by  operations.  In addition,  during the third  quarter of 2000,  the
Company obtained the secured promissory loan in the amount of $1,420,000.

     At September 30, 2000, the Company had  consolidated  cash totaling $25,128
and a working capital  deficit of $7,310,440.  At December 31, 1999, the Company
had  consolidated  cash  totaling  $151,685  and a working  capital  deficit  of
$4,131,902.  The increase in working  capital  deficit was due  primarily to the
reduction in cash,  which was used to fund the  Company's  recent net losses and
the increase in accounts payable and accrued liabilities.

     The principal source of capital for the Company's operations is the line of
credit facility between the Company and IBJ Whitehall, as Agent (the "IBJ Credit
Facility"), which consists of the following:

     (i)   the IBJ Revolving  Loan  facility of up to $12 million.  Advances are
           made by  formula  based  on the  Company's  accounts  receivable  and
           inventory  balances.  At September  30, 2000,  the  revolving  credit
           facility  had  approximately  $7,960,284  of  a  possible  $8,350,783
           outstanding.  Interest  is  calculated  at the  prime  rate plus .75%
           (10.25% at September 30, 2000)

     (ii)  the IBJ Term Loan, secured by machinery equipment, having an original
           loan  amount  of  approximately  $2,108,000  of  which  approximately
           $1,634,042   was   outstanding   at  September   30,  2000.   Monthly
           installments  of $36,459  are due until  maturity,  at which time any
           balance  owing is due.  Interest is calculated at the prime rate plus
           1% (10.5% at September 30, 2000)

     (iii) the CapEx Loan,  secured by machinery  and equipment put into service
           under a capital  expenditure  facility of 1999. The CapEx Loan allows
           for the financing of up to $1,000,000  of capital  expenditures  from
           May 1, 1999 at an advance  rate of 80% of the cost of the  equipment.
           The  original  amount  outstanding  at the closing

                                       13
<PAGE>


          was  $238,990.  At September  30, 2000,  the balance  outstanding  was
          approximately $195,839. The loan calls for monthly payments of 1/72 of
          each advance with any balance being due at the maturity date. Interest
          is calculated at the prime rate plus 1% (10.5% at September 30, 2000).

     The Company's  obligation to pay the principal of, interest on, premium, if
any,  and all other  amounts  payable on account of the IBJ Credit  Facility  is
secured by the inventory,  accounts  receivables  and machinery and equipment of
the Company, as well as the pledge of all of the Company's ownership interest in
it's principal subsidiary,  Quality Automotive Company. Pursuant to the terms of
the IBJ Credit Facility,  under certain  restrictive  criteria,  the Company may
choose to borrow under a formula  equal to 300 basis points over LIBOR.  The IBJ
Credit  Facility  contains  covenants,  which restrict the Company's  ability to
declare cash  dividends  and require the Company to maintain  certain  financial
ratios such as fixed charge  coverage  and a minimum net worth.  The Company was
and continues to be in noncompliance with certain financial  covenants under the
IBJ  Credit  Facility.   Until  such  time  as  the  Company  is  no  longer  in
non-compliance with the financial covenants contained in the IBJ Credit Facility
or the IBJ Credit  Facility is amended in a manner to cure such  non-compliance,
IBJ  could  accelerate  the  maturity  date of the  IBJ  Credit  Facility.  Such
acceleration  of the  maturity  date of the IBJ  Credit  Facility  would  have a
material adverse effect on the Company.

     In addition to the IBJ Credit  Facility,  the Company  obtained  additional
financing  through  the  sale on June  30,  1998,  of Reg S  Debentures,  in the
aggregate  principal  amount  of  $2,250,000.  The  Reg S  Debentures  represent
unsecured  obligations of the Company and  outstanding  Reg S Debentures must be
converted into shares (the "Conversion Shares") of the Company's Common Stock at
maturity date  (December 31, 2000) unless they have been converted  earlier,  at
the option of the holder.  The conversion  price of the Reg S Debentures will be
equal to 80% of the average  closing bid price of the shares of Common  Stock as
quoted on the Nasdaq SmallCap  Market for the five (5) trading days  immediately
preceding the date of conversion.  Notwithstanding the foregoing, the Company is
not  obligated  to issue  more than  209,660  Conversion  Shares  (the  "Maximum
Conversion Share Allotment") without obtaining approval of its stockholders.

     The Reg S  Debentures  provided  for  interest at 8% per annum  (subject to
increase under certain circumstances),  payable upon conversion or redemption of
the Reg S Debentures,  in cash or shares of Common  Stock,  at the option of the
Company.  The interest rate increased to 20% per annum for the period commencing
January 1, 1999,  since the  underlying  Conversion  Shares are not covered by a
registration statement filed with the SEC. At such time as the underlying shares
are tradable,  without regard to registration,  the interest rate will revert to
the 8% per  annum.  Further,  if upon  conversion  of the Reg S  Debentures  the
Company  would  otherwise  issue shares of Common Stock in excess of the Maximum
Conversion  Share  Allotment,  the interest  rate on the Reg S Debentures  will,
effective as of the issuance of the Maximum Conversion Share Allotment, increase
to 25% per annum with respect to the unconverted  Reg S Debentures.  The Company
has agreed that if it has not either retired the remaining Reg S Debentures with
accrued but unpaid  interest within ten (10) days of the issuance of the Maximum
Conversion  Share Allotment or issued a proxy statement  soliciting  stockholder
authorization to issue additional  shares in lieu of such cash redemption of the
remaining  Reg S  Debentures,  the  Company  would  pay a  penalty  equal to the
difference between the interest rate paid since inception and 25% on those Reg S
Debentures  which remain  outstanding  after the  issuance of the Maximum  Share
Allotment.  Such penalty will not be applicable if the Company  issues the proxy
statement referred to above.

     In May 2000,  the  Company  filed a  preliminary  proxy  statement  for the
purpose of,  among other  things,  obtaining  stockholder  authorization  to the
issuance  of  additional  shares  in  excess  of the  Maximum  Conversion  Share
Allotment in connection with a further request for the conversion of outstanding
Reg S  Debentures  by the  holders  thereof.  Subsequent  thereto,  the  Company
proceeded with negotiations with a prospective  strategic investor for an equity
investment  in the Company,  which  transaction  contemplated  the  simultaneous
conversion of the outstanding Reg S Debentures into a certain  percentage at the
Company's common stock. As a result, the Company was unable to file a definitive
proxy statement until such time as a formal agreement would be entered into with
respect to the strategic  investment.  The strategic  investment as  negotiated,
however, was conditioned,  among other things, upon the continued listing of the
Company's  common stock on the Nasdaq Small Cap market.  Effective,  October 19,
2000, the Company's  common stock was delisted from the Nasdaq Small Cap market.
Subsequent  to  such  delisting,  all  discussions  relating  to  the  strategic
investment  have ceased  entirely.  The  Company has not yet filed a  definitive

                                       14
<PAGE>


proxy  statement.  By letter  dated  December  5,  2000,  the  holders  of Reg S
Debentures  notified the Company that they declared the Company to be in default
under the terms of the Reg S Debentures and demanded an  accelerated  payment of
principal  and interest on the  outstanding  Reg S  Debentures.  The Company has
initiated discussions in an effort to resolve this matter.

     During the  second  quarter  of 2000,  the  Company  obtained  the  Secured
Promissory Loan in the aggregate  amount of $1,420,000.  The Secured  Promissory
Loan consisted of $1,000,000 of cash received and approximately $347,000 related
to the  conversion  of certain  payables  for  inventory.  The Company  recorded
interest  expense in the third  quarter of 2000 for the  difference  between the
face value of the Secured Promissory Loan and the value of the cash received and
payables converted. The cash proceeds have been applied towards the reduction of
amounts  outstanding under the IBJ Credit Facility.  The Secured Promissory Loan
accrues  interest at an annual rate of 10%. The  interest  rate is subject to be
increased to 13% in the event of a default.  The Secured  Promissory Loan is due
on October 30, 2002. The Secured  Promissory Loan has been classified as current
as it contains a covenant that requires  repayment in the event that the Company
fails  to  pay  certain  indebtness,  which  would  likely  occur  if any of the
Company's  debt that is  currently in non  compliance  with debt  covenants  was
accelerated. The Secured Promissory Loan is secured by the Company's real estate
and operating office, and warehouse facilities.

                                     PART II
                                OTHER INFORMATION

ITEM 5: OTHER INFORMATION

     In May 2000, Nasdaq informed the Company that it was not in compliance with
the  net  tangible  asset/market   capitalization/net  income  requirements  for
continued  listing on the Nasdaq SmallCap Market.  The Company  responded to the
notice  and  was  given  until  September  10,  2000,  to  comply.  The  Company
subsequently  requested that a Nasdaq Listing  Qualifications Panel agree to the
continued listing of its common stock on the Nasdaq Small Cap market. On October
18, 2000,  the Panel  determined to delist the  Company's  common stock from the
Nasdaq Stock Market  effective  with the open business on October 19, 2000.  The
Company's common stock has commenced trading on the OTC Bulletin Board.

     On  October  13,  2000 the  holders  of the  outstanding  Reg S  Debentures
provided  written notice to the Company claiming that the Company was in default
of the terms of the Reg S  Debentures  for failure to timely  file a  definitive
proxy statement with respect to stockholder authorization for issuance of common
stock in excess of the Maximum  Conversion Share  Allotment.  Subsequent to such
notification and in response to a letter from the Company  explaining the causes
for the delay in filing such definitive  proxy,  the holders of Reg S Debentures
provided  further  written notice on November 9, 2000,  directing the Company to
expedite the filing of such  definitive  proxy and  requesting  that the Company
agree  to  extend  the  maturity  date of the Reg S  Debentures  for one year to
December 31, 2001. The Company has not taken any action with respect to filing a
definitive  proxy  statement  or  extending  the  maturity  date  of  the  Reg S
Debentures.  By letter dated  December 5, 2000,  the holders of Reg S Debentures
notified the Company that they  declared the Company to be in default  under the
terms of the Reg S Debentures and demanded an  accelerated  payment of principal
and interest on the  outstanding  Reg S  Debentures.  The Company has  initiated
discussions in an effort to resolve this matter.

                                       15
<PAGE>


     ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

          10.1 Amended and Restated Secured  Promissory Note dated September 27,
               2000  from  the  Company,  Quality  Automotive  Company  and U.S.
               Automotive Friction, Inc to FDP Brakes, Inc.

          10.2 Amendment to Deed of Trust, Fixture Filing and Security Agreement
               dated  September  27, 2000 among Quality  Automotive  Company and
               Ellen  and  David G.  Lane as  trustees  for the  benefit  of FDP
               Brakes, Inc.

          27   Financial Data Schedule

     (b)  Form 8-K

          None.

                                       16
<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: December 8, 2000

                                             U.S. AUTOMOTIVE MANUFACTURING, INC.
                                         By: /s/ MARTIN D. CHEVALIER
                                             --------------------------------
                                                 Martin D. Chevalier,
                                                 President
                                                 (principal and sole officer)


                                       17