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, 1999

[_]  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 12, 1999,  the  Registrant  had 1,082,766  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, 1999
             (unaudited) and December 31, 1998  .......................... 3

         Consolidated Statements of Operations (unaudited) for the
             three months ended March 31, 1999 and March 31, 1998 ........ 4

         Consolidated Statements of Cash Flows (unaudited) for
             the three months ended March 31, 1999 and March 31, 1998 .... 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................................................ 12

Item 1.  Legal Proceedings................................................ 12

Item 2.  Changes in Securities and Use of Proceeds........................ 12

Item 4.  Submission of Matters to a Vote of Security Holders.............. 13

Item 6.  Exhibits and Reports on Form 8-K................................. 13

SIGNATURES................................................................ 14


                                       2
<PAGE>


                                     PART I
                              FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

                       U.S. AUTOMOTIVE MANUFACTURING, INC.

                           Consolidated Balance Sheets
                                 March 31, 1999
<TABLE>
<CAPTION>
ASSETS
                                                               March 31, 1999    December 31, 1998
                                                               --------------    -----------------
                                                                (unaudited)
<S>                                                              <C>                 <C>
Current Assets:
        Cash                                                     $    444,248        $    338,641
        Accounts receivable (net of allowance for doubtful
          accounts of approximately $127,319)                       5,243,373           5,043,316
        Inventories                                                 8,912,128           9,420,570
        Prepaid expenses, and other                                   153,670              16,078
                                                                 ------------        ------------
        Total Current Assets                                       14,753,419          14,818,605

Property, plant and equipment (net of accumulated
        depreciation of $1,863,638 and $1,599,818,
        respectively)                                              10,863,575          11,062,084
Deferred financing costs                                              189,000             216,000
Goodwill, net                                                       5,874,920           5,954,669
                                                                 ------------        ------------
TOTAL ASSETS                                                     $ 31,680,914        $ 32,051,358
                                                                 ============        ============
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
        Line of credit                                              8,824,122           7,691,370
        Current Portion of long-term debt                             107,627             693,163
        Accounts payable                                            4,372,617           3,965,184
        Accrued liabilities                                           994,556             756,703
                                                                 ------------        ------------
                  Total Current Liabilities                        14,298,922          13,106,420

Long-term debt, less current portion                                  147,262             552,408
Redeemable convertible debentures                                   2,250,000           2,250,000
Line of Credit                                                             --           1,050,000
Notes payable to shareholders                                       5,070,000           4,980,000
                                                                 ------------        ------------
                  Total Liabilities                                21,766,184          21,938,828
                                                                 ------------        ------------
Stockholders' Equity:
Issued & outstanding capital stock $.001 par value                     15,759              15,725
Additional paid-in capital                                         38,922,177          38,885,545
Accumulated deficit                                               (29,023,206)        (28,788,740)
                                                                 ------------        ------------
                  Total stockholders' equity                        9,914,730          10,112,530
                                                                 ------------        ------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                         $ 31,680,914        $ 32,051,358
                                                                 ============        ============
</TABLE>



                 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 March 31,
                                                   ---------------------------
                                                      1999              1998
                                                   -----------      -----------
Net Sales                                          $ 7,320,955      $ 3,419,873
Cost of Goods Sold                                   5,305,134        2,653,327
                                                   -----------      -----------
Gross Profit                                         2,015,821          766,546
                                                   -----------      -----------
Operating Expenses:
    Selling and delivery                               782,815          532,004
    General and administrative                         969,351          960,825
                                                   -----------      -----------
    Total Operating Expenses                         1,752,166        1,492,829
                                                   -----------      -----------
Operating income (loss)                                263,655         (726,283)
Interest expense                                      (498,121)        (247,957)
                                                   -----------      -----------
Net Loss                                           $  (234,466)     $  (974,240)
                                                   ===========      ===========
Net Loss per share, basic and diluted                 $ (0.22)      $     (0.93)
                                                   ===========      ===========
Weighted average shares outstanding                 1,048,656         1,048,273
                                                   ===========      ===========


                 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,
                                                                              ------------------------------------
                                                                                 1999                     1998
                                                                              -----------              -----------
CASH FLOW FROM OPERATING ACTIVITIES
<S>                                                                           <C>                      <C>
Net Loss                                                                      $  (234,466)             $  (974,240)

Adjustments to reconcile net loss
  to net cash provided by (used in) operating activities:
     Depreciation                                                                 263,820                  243,881
     Amortization                                                                 106,749                   79,749
     Provision for doubtful accounts                                                   --                  (11,603)
     Rollover of accrued interest into shareholder note                            90,000                       --
     Issuance of common stock in satisfaction of
       related party accounts payable                                              36,666                       --
     Increase (decrease) in:
          Accounts receivable                                                    (200,057)                 (70,817)
          Inventory                                                               508,442                  162,168
          Prepaid expenses and other                                             (137,592)                 (64,902)
     (Increase) decrease In:
          Accounts payable and accrued liabilities                                645,286                 (498,550)
                                                                              -----------              -----------

Total adjustments                                                               1,313,314                 (160,074)
                                                                              -----------              -----------
Net Cash provided by (used in) operating activities                             1,078,848               (1,134,314)

CASH FLOWS FROM INVESTING ACTIVITIES
     Capital Expenditures                                                         (65,311)                (433,011)
                                                                              -----------              -----------

CASH FLOW FROM FINANCING ACTIVITIES

     Net (repayments) borrowings on lines of credit and notes payable            (907,930)                 902,820
                                                                              -----------              -----------

NET INCREASE (DECREASE) IN CASH                                                   105,607                 (664,505)

CASH-beginning of period                                                          338,641                1,001,843
                                                                              -----------              -----------
CASH-end of period                                                            $   444,248              $   337,338
                                                                              ===========              ===========
</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, 1999
                                   (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   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  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) Max Life,(R) Dual Friction,(TM)  Ultra Brake,(TM) Gold Max,(TM) and
Quality Automotive(TM)  tradenames and various private label packaging. In 1998,
the Company's products were also sold under the Roinco,(TM) tradename.

     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, 1999, are not necessarily indicative of the
results to be expected for the year ending  December 31, 1999.  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, 1998.

NOTE 3: REVERSE SPLIT

     On February 5, 1999, the Company's  Board of Directors  approved a 1-for-15
reverse  stock split with respect to the Company's  common stock.  All share and
per share information contained in


                                       6
<PAGE>


these financial  statements have been  retroactively  adjusted to give effect to
the reverse stock split.

NOTE 4: INVENTORY

     Major inventory components were as follows:

                                March 31, 1999         December 31, 1998
                                --------------         -----------------
Raw materials                     $3,278,101              $4,131,240
Work in Progress                      70,670                 107,133
Finished goods                     5,563,357               5,182,197
                                   ---------               ---------
                                  $8,912,128              $9,420,570
                                   =========               =========

NOTE 5: DEBT

Private Placement

     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 a  director  and an  affiliate  of  another  director  of the  Company,
respectively  (the  "February 1998  Offering").  The sale was made pursuant to a
private placement consisting of (i) 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 a maturity date of February 28, 1999 (the  "Notes"),
and (ii)  warrants to purchase up to an  aggregate of 6,666 shares of the Common
Stock,  maturing in February  2003,  at a  conversion  price equal to $30.00 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 $0.75 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 outstanding  principal balance,  together with
accrued interest, under the Notes was fully repaid by the Company on or prior to
the February 28, 1999 maturity date.

Convertible Debentures

     In June 1998, the Company obtained additional financing through the sale of
8%  redeemable  convertible  debentures  (each  a  "Reg  S  Debenture"),  in the
aggregate  principal  amount of  $2,250,000,  pursuant to Regulation S under the
Securities Act of 1933, as amended (the "Act") (the "Reg S Offering"). 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%
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").  The Company  also  agreed,  at its  expense,  to (x) file with the
Securities  and  Exchange  Commission  ("SEC") on or before  August 29,  1998, a
registration  statement  covering the issuance by the Company of the  Conversion
Shares  and (y) use its  reasonable  best  efforts  to cause  such  registration
statement to be declared effective under the Act as soon as possible thereafter.
As at March 31, 1999, the Company has yet to file a registration  statement;  it
is anticipated that the Company will file such registration statement during the
second quarter of 1999.


                                       7
<PAGE>

     The Reg S  Debentures  provided for initial  interest  rate of 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 as a result of the  underlying  Conversion
Shares  having  not  been  covered  by such  date by an  effective  registration
statement filed with the SEC. It is not expected that the Conversion Shares will
be able to be registered  with the SEC before June 30, 1999. At such time as the
underlying  shares are registered or tradable,  without regard to  registration,
the interest rate shall 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 of the Reg S Debentures and 25% on those Reg S Debentures which remain
outstanding  after the  issuance of the Maximum  Share  Allotment.  Such penalty
shall not be applicable if the Company  issues the proxy  statement  referred to
above.

NOTE 6: STOCKHOLDERS' EQUITY

     On March 31,  1999,  the  Company  issued to two  directors  of the Company
11,759 and 22,734 shares of the Company's  Common Stock, in exchange for accrued
but unpaid  obligations  owing by the Company to such  individuals  and/or their
affiliates.

     On March 31,  1999,  the  Company  granted to  executive  officers  and key
employees of the Company  options  pursuant to the Company's 1992 and 1998 Stock
Option Plan, as follows:

     (i)  The Company granted to two executive  officers of the Company ten-year
          options pursuant to the 1992 Stock Option Plan to purchase up to 1,800
          shares each of the  Company's  Common Stock,  at an exercise  price of
          $1.063  (the  closing  sales  price for the Common  Stock on March 31,
          1999). Such options vested immediately;

     (ii) The Company granted to a key employee of the Company  ten-year options
          pursuant to the 1992 Stock Option Plan to purchase up to 307 shares of
          the  Company's  Common  Stock,  at an  exercise  price of $1.063  (the
          closing  sales  price for the Common  Stock on March 31,  1999).  Such
          options shall vest in equal quarterly  installments over the course of
          four (4) years from the date of granting; and

     (iii)The Company  granted to certain key  employees of the Company  options
          pursuant to the Company's  1998 Stock Option Plan to purchase up to an
          aggregate  of  29,000  shares of the  Company's  Common  Stock,  at an
          exercise  price (the closing sales price for the Common Stock at March
          31,  1999) of  $1.063.  Such  options  shall  vest in equal  quarterly
          installments  over  the  course  of four  (4)  years  from the date of
          granting.

     In  addition,  on March 31, 1999,  the Company  re-priced  all  outstanding
options  under the 1992 Stock  Option  Plan,  exercisable  to  purchase up to an
aggregate of 93 shares of the Company's  Common Stock,  to $1.063 per share (the
closing  sales  price of the  Company's  Common  Stock  reported  by the  Nasdaq
SmallCap Market as of the close of business on March 31, 1999).


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;  uncertainty with respect to the Year 2000 effect on
the Company and its many suppliers and customers;  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",


                                       8
<PAGE>

"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.

General

     During the three  months  ended March 31,  1999,  the  Company  doubled its
revenues while  reducing its loss by  approximately  seventy-five  percent (75%)
when compared to the year ended December 31, 1998.  Management currently expects
the trend of  improvement to continue and  anticipates  that the Company will be
profitable  in the second  quarter of 1999 and for the fiscal year,  as a whole.
Based on new and expanded business  relationships,  the Company expects revenues
for fiscal year 1999 to exceed  $35,000,000.  The  Company's  ability to achieve
profitability;  however,  is  dependent  upon many  factors  including,  but not
limited to, the  realization of anticipated  sales,  the absence of any material
increases in costs of goods sold from  current  levels and the ability to obtain
sufficient  financing upon  expiration of the Company's  current credit facility
with LaSalle Business Credit,  Inc. There can be no assurance that the foregoing
or other factors will not prevent the Company from achieving these expectations.

Results of Operations

Comparison  of Three Months Ended March 31, 1999 to Three Months Ended March 31,
1998

     Net  Sales.  Net sales  for the  three  months  ended  March 31,  1999 were
$7,320,955  as compared to net sales of  $3,419,873  for the three  months ended
March 31, 1998.  The increase of  $3,901,082  or 114% resulted from sales to new
customers.

     Gross Profit.  For the three months ended March 31, 1999, the Company had a
gross profit of $2,015,821  compared to a gross profit of $766,546 for the three
months ended March 31, 1998.  The increase in gross profit was  attributed  to a
114%  increase in sales  offset in part,  by an increase in the overall  cost of
sales of only 100% as a result of economies of scale realized in connection with
such  increased  sales.  Cost of sales for the three months ended March 31, 1999
was  $5,305,134 as compared to  $2,653,327  for the three months ended March 31,
1998.

     Selling,  General  and  Administrative   Expenses.   Selling,  general  and
administrative  expenses  for  the  three  months  ended  March  31,  1999  were
$1,752,166 as compared to $1,492,829  for the three months ended March 31, 1998,
representing an increase of 17.4%. The increase was the result of an increase of
$250,811  (47%) in selling and  distribution  costs and an increase of $8,526 in
general and administrative expenses.

     Interest  Expense.  Interest expense increased by $250,164 from $247,957 in
the first  quarter  of 1998 to  $498,121  in the  first  quarter  of 1999.  This
increase was attributable to increased borrowing necessitated by the doubling of
sales and the increased rate of interest under existing borrowing.

     Net Income (Loss). The net loss in the first quarter of 1999 was ($234,466)
or ($.22)  per share  based on  1,048,656  weighted  average  common  and common
equivalent shares outstanding compared to a net loss of ($974,240) or ($.93) per
share in the first quarter of 1998 based on 1,048,273  weighted  average  common
and common equivalent shares  outstanding.  The decrease in net loss of $739,774
was primarily the result of the economies of scale realized through the material
increase in sales offset by increased  interest expense resulting from increased
borrowing.

Liquidity and Capital Resources

     During the three  months  ended March 31,  1999,  the Company  financed its
operations  primarily through  borrowings under its lending  facilities and cash
generated by operations.


                                       9
<PAGE>


     At March 31, 1999, the Company had consolidated  cash totaling $444,248 and
working capital of $454,497.  At December 31, 1998, the Company had consolidated
cash  totaling  $338,641 and working  capital of  $1,712,185.  This  decrease in
working  capital was due  primarily to the Company's  revolving  lines of credit
maturing in less than one year from the quarter ended March 31, 1999.

     In  February  1999,  the  Company  paid in full the  outstanding  principal
balance under the  promissory  notes,  together with accrued  interest  thereon,
previously executed by the Company pursuant to the February 1998 Offering,

     The principal source of capital for the Company's operations is the line of
credit (the "Credit Facility") between Quality and LaSalle Business Credit, Inc.
("LaSalle"), which Credit Facility matures on July 31, 1999. The Credit Facility
consists of the following:

     (i)  a secured revolving credit facility of up to $10 million. Advances are
          made  by  formula  based  on the  Company's  accounts  receivable  and
          inventory.  At March 31, 1999, the revolving credit had  approximately
          $5.9  million of a possible  $7.5  million  outstanding.  Interest  is
          calculated at the prime rate plus 2% (9.75% at March 31, 1999)

     (ii) a secured loan covering machinery equipment, property and plant having
          an  original  loan  amount  of   approximately   $3,500,000  of  which
          $1,232,000 was outstanding at March 31, 1999. Monthly  installments of
          $20,800 are due until  maturity,  at which time any  balance  owing is
          due.  Interest is calculated at the prime rate plus 2% (9.75% at March
          31, 1999)

     (iii)a secured  loan  covering  machinery  and  equipment  put into service
          under a capital  expenditure  facility of 1995.  The  original  amount
          outstanding  was  approximately  $1,000,000.  At March 31,  1999,  the
          balance  outstanding was  approximately  $225,000.  The loan calls for
          monthly payments of $25,000 with any balance being due at the maturity
          date. Interest is calculated at the prime rate plus 2% (9.75% at March
          31, 1999).

     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  occurrence  of an event of
default specified in the Credit Facility  (including  failure to satisfy certain
financial  covenants),  the maturity of the outstanding principal amounts of the
revolving credit loans and the equipment loans may be accelerated by LaSalle who
may also  foreclose  on the  secured  assets of  Quality.  The  Company  was and
continues to be in  noncompliance  with certain  financial  covenants  under the
Credit Facility.  Such noncompliance has been continuing since the Merger. Until
such  time  that  Quality  is no longer  in  non-compliance  with the  financial
covenants  contained in the Credit Facility or the Credit Facility is amended in
a manner to cure such  non-compliance,  LaSalle  may be able to  accelerate  the
maturity date of the Credit Facility.  Management believes that should it become
necessary or advisable to change its borrowing relationship,  there are a number
of financial institutions willing to provide necessary financing to the Company.

     The Credit Facility had an initial  maturity date of March 31, 1999. In the
fourth quarter of 1998,  Quality and LaSalle agreed not to automatically  extend
the maturity of the Credit Facility.  The Company's  business has  approximately
doubled over the past twelve months and a continuation of the Credit Facility in
its existing  form was not deemed  prudent by the Company's  management.  In the
interim,  by the Fifth Amendment to the Credit Facility dated February 26, 1999,
LaSalle  (i)  increased  the  amount of the  revolving  credit  under the Credit
Facility  from  $7,500,000  to  $10,000,000,  (ii)  increased  the  sub-limit of
advances on inventory from $4 million to $4.5 million,  (iii)  re-advanced up to
$1,000,000  based on its  existing  security  interests  in the fixed  assets of
Quality,  and (iv) granted an interim  extension  of the  maturity  date to July
31,1999, to allow the Company to negotiate expanded new facilities.

     The Company  has  discussed  with  LaSalle  (and  several  other  financial
institutions) its forecasted need for new financing arrangements. Although there
can be no assurance that new financing arrangements will be procured or that any
such  arrangements  will be adequate to finance the Company's  forecasted needs,
management  believes  that such new  financing  will be  sufficient  to meet the
Company's on-going financing needs and will be obtained prior


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<PAGE>


to the expiration of its current financing facilities. An inability to refinance
the Company beyond the scheduled maturity date of July 31, 1999, however,  would
have a material adverse impact on the Company's ability to continue its business
operations.

     In addition to the Credit  Facility,  up to $2.0 million was made available
to the Company under a revolving  credit  agreement (the "USAM Revolving  Loan")
entered  into on March 31, 1998.  At May 14, 1999,  an aggregate of $1.4 million
had been advanced to the Company under such USAM Revolving Loan. Under the terms
of the USAM  Revolving  Loan, the Lender is not obligated to advance the Company
more than $1 million at any time during the term of the 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  from the date of the  initial  advance,  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 an aggregate of 28,000  shares of the Company's
Common Stock, as follows:  (i) five year warrants to purchase up to 7,000 shares
of the Company's  Common  Stock,  exercisable  after March 31, 1999,  granted in
March 1998;  (ii) five year warrants to purchase an  additional  7,000 shares of
the  Company's  Common  Stock,  exercisable  after  March 31,  1999,  granted in
September  1998,  so long as that  funds  having  been  advanced  under the USAM
Revolving Loan remained  outstanding;  and (iii) additional warrants to purchase
up to an aggregate of 14,000  additional shares of the Company's Common Stock in
the event that funds advanced under the USAM Revolving Loan remain  outstanding,
commencing  March 31, 1999 and  continuing  at each three (3) month  anniversary
thereafter  until  December 31, 1999,  to grant to the lender at each such three
month anniversary five year warrants for the purchase of 3,500 additional shares
of the  Company's  Common  Stock,  exercisable  at the  time of  such  granting.
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  March 31, 1999 or the granting  date  whichever  is later.  The
Company has agreed to grant the lender or its assigns  "piggyback"  registration
rights with respect to the shares underlying such warrants.

Impact of the Year 2000

     In 1997,  as part of a general  improvement  to  Company  reporting,  a new
manufacturing  and financial  software  package was  purchased.  As part of that
general  upgrade,  the  Company  moved  from an IBM36 to an IBM  AS400.  The new
system,  which fully  contemplates  the computer  related  problems with the new
millennium,  continues to be in the final stages of testing in the Tappahannock,
Virginia facility.  The Company's new system  accommodates  remote locations and
the Sanford,  Florida  facility is expected to be  operational  during the third
quarter of 1999.

     The  Company,  in assessing  the  readiness  of third party  suppliers  and
customers,  has  concentrated on alternative  back-up  procedures to minimize or
eliminate any adverse effect on the Company's business in the event customers or
suppliers  systems have a Year 2000 problem.  As at March 31, 1999,  the Company
believes it has set sufficient back-up systems in place to insulate its business
from a Year 2000  problem.  Nevertheless,  although  the Company does not expect
significant   costs  or  disruptions  in  operations  from  its  customers'  and
suppliers'  inability  to achieve  Year 2000  compliance,  the  Company  can not
guaranty customer or supplier performance.  Accordingly,  it cannot predict what
effect noncompliance might have. While the Company has a substantial  investment
in the new computer and software,  such costs were incurred as part of a general
system upgrade and not in response to a potential Year 2000 problem. The Company
estimates that costs incurred in investigating and correcting any potential Year
2000 problem have been and will continue to be immaterial.


                                       11
<PAGE>


                                     PART II
                                OTHER INFORMATION

ITEM 1: LEGAL PROCEEDINGS

     On August 21, 1998, an eight count complaint,  entitled Al Dulisse, Bernard
Bard, Michael Scicchitano and Barry Schwartz vs. U.S. Automotive  Manufacturing,
Inc., f/k/a R.T.  Industries,  Inc., a Delaware  corporation (Case No. 98-007490
AN),  was  filed in the  Circuit  Court of the  Fifteenth  Judicial  Circuit  of
Florida,  in and for Palm Beach County (the "Complaint").  The Complaint alleges
that the Company failed to recognize stock options purportedly exercised by each
plaintiff under alleged stock option agreements with the Company's  predecessor,
R.T.  Industries,  Inc. The Complaint  contained a breach of contract  claim and
unpaid-wages  claim for each of the four  plaintiffs;  however on  November  23,
1998,  the  Court  entered  an  Order  dismissing  with  prejudice  all  of  the
unpaid-wages claim.  Accordingly,  the action is proceeding solely on the breach
of contract claims.

     Various other legal proceedings and claims have been or may be from time to
time  asserted  against  the  Company in the  ordinary  course of its  business.
Management believes that it has meritorious  defenses and will vigorously defend
itself with respect to all existing  proceedings or claims. Any costs or damages
that management estimates may be paid as a result of these proceedings or claims
are accrued when the  liability,  if any, is considered  probable and the amount
can be reasonably  estimated.  Although the ultimate  disposition of proceedings
and claims currently pending is not presently determinable,  management believes
that,  after  consultation  with counsel,  the likelihood that material costs or
damages  will be incurred by the Company as a result of any pending  proceedings
is remote.

ITEM 2: CHANGES IN SECURITIES AND USE OF PROCEEDS

     On March 31, 1999,  the Company  granted five year warrants  exercisable to
purchase  up to 3,500  shares of its Common  Stock  pursuant to the terms of the
USAM Revolving Loan.  Such warrants are  exercisable  immediately at an exercise
price of $1.43 (eighty  percent (80%) of the average closing sales price for the
Common Stock for the twenty (20) trading days preceding  March 31, 1999).  Under
the  terms  of the  USAM  Revolving  Loan,  the  Company  could,  under  certain
circumstances, be required to grant additional warrants, exercisable to purchase
up to an aggregate of 10,500  additional  shares of the Company's  Common Stock,
provided monies advanced pursuant to such USAM Revolving Loan are outstanding at
the time of such grants. At May 12, 1999, warrants exercisable to purchase up to
an aggregate  of 17,500  shares of the  Company's  Common Stock had been granted
pursuant to the USAM Revolving Loan.

     On March 31,  1999,  the  Company  granted to  executive  officers  and key
employees of the Company  options  pursuant to the Company's 1992 and 1998 Stock
Option Plan, as follows:

     (i)  The Company granted to two executive  officers of the Company ten-year
          options pursuant to the 1992 Stock Option Plan to purchase up to 1,800
          shares each of the  Company's  Common Stock,  at an exercise  price of
          $1.063  (the  closing  sales  price for the Common  Stock on March 31,
          1999). Such options vested immediately;

     (ii) The Company granted to a key employee of the Company  ten-year options
          pursuant to the 1992 Stock Option Plan to purchase up to 307 shares of
          the  Company's  Common  Stock,  at an  exercise  price of $1.063  (the
          closing  sales  price for the Common  Stock on March 31,  1999).  Such
          options shall vest in equal quarterly  installments over the course of
          four (4) years from the date of granting; and

    (iii) The Company  granted to certain key  employees of the Company  options
          pursuant to the Company's  1998 Stock Option Plan to purchase up to an
          aggregate  of  29,000  shares of the  Company's  Common  Stock,  at an
          exercise  price (the closing sales price for the Common Stock at March
          31,  1999) of  $1.063.  Such  options  shall  vest in equal  quarterly
          installments  over  the  course  of four  (4)  years  from the date of
          granting.

     In connection with the above  referenced  issuances,  the Company relied on
Section 4(2) under the Securities Act of 1933 as  transactions  by an issuer not
involving any public offering.

     In  addition,  on March 31, 1999,  the Company  re-priced  all  outstanding
options  under the 1992 Stock  Option  Plan,  exercisable  to  purchase up to an
aggregate of 93 shares of the Company's  Common Stock,  to $1.063 per share (the
closing  sales  price of the  Company's  Common  Stock  reported  by the  Nasdaq
SmallCap Market as of the close of business on March 31, 1999).



                                       12
<PAGE>

     At January 1, 1999, the interest rate of the Reg S Debentures was increased
to 20%  per  annum  (from  8% per  annum)  until  such  time  as the  underlying
Conversion Shares are covered by an effective  registration statement filed with
the SEC or the Company  redeems the same. It is not expected that the Conversion
Shares will be able to be registered  with the SEC before June 30, 1999. At such
time as the  underlying  Conversion  Shares  are  tradable,  without  regard  to
registration, the interest rate shall revert to the 8% per annum.


ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     At a special  meeting  of the  stockholders  held  February  5,  1999,  the
Company's  stockholders  authorized  a 1 for 15 reverse  split of the  Company's
issued and outstanding common stock, which was effected on February 11, 1999.

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

          3(i).1  Certificate  of  Amendment  of the  Company's  Certificate  of
                  Incorporation, dated February 11, 1999

          27      Financial Data Schedule

     (b)  Form 8-K

          None.


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<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 13, 1999

                                             U.S. AUTOMOTIVE MANUFACTURING, INC.



                                             By: /s/ John W. Kohut
                                                 -------------------------------
                                                 John W. Kohut,
                                                 Chairman of the Board
                                                 and principal financial officer


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