The Indians lead by as many 9 points in the first half before East Georgia pulled within 4 at the half, 43-39.
East Georgia came out after the half and turned it on, taking the lead 44-43 with 19:15 left in the game.
The Indians would come back with 17.8 seconds left when Chris Rhodes hit a 3-pointer to tie the game, 84-84.
Donnie James then inadvertently fouled an East Georgia player.
He hit the front end of two but missed the second one, giving the Indians one last chance.
With 2.4 seconds USC head coach Travis Garrett called time to set up, Chris Rhodes for another shot but was unable to connect.
"We have to stop turning the ball over, I don't know exactly how many we had in the game but it was around 30. When you give the other team that many opportunities nothing but bad things will happen. We also missed 19-free throws, that can't happen. I think we have made strides but then we back right back up," said head coach Travis Garrett.
The final was East Georgia 85, USC Salkehatchie 84.
The Indians fall to 0-4 and East Georgia is now 3-0.
The Indians will be back in action at the SGT Classic in Americus, Georgia at 5:30 pm.
Leading scorers for USC Salkehatchie-
Darnell Jackson-17
Chris Rhodes- 13
Nate Drayton- 13
Donnie James- 10
Raston Brown- 8
Leading scorers for East Georgia-
Lamar Richardson-21
Thomas Fryar- 15