U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
<TABLE>
<CAPTION>
<S>                                <C>                 <C>                           <C>


                                   FORM 10-KSB
(Mark One)
[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
         OF 1934
                  For the fiscal year ended December 31, 1997

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

Commission file number                                    1-5673

                             RANGER INDUSTRIES, INC.
                             (Exact name of small business issuer as specified in its charter)

                          Connecticut                                                    06-0768904
                 (State or other jurisdiction                               (I.R.S. Employer Identification No.)
               of incorporation or organization)

           1 Regency Drive, Bloomfield, Connecticut                                         06002
           (Address of principal executive offices)                                      (Zip Code)

Issuer's telephone number                             (860) 726-1208

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $0.0l par value
                                (Title of Class)

         Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange
Act during the preceding 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

         Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in
this form, and no disclosure will be contained., to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form
10-KSB.       [X]

         State issuer's revenues for its most recent fiscal year:  NONE.

         State the aggregate market value of voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as of
a specified date (March 17, 1998) within the past 60 days: $2,588,255

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)
         State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date (March 23, 1998): 4,788,644
shares.

                   DOCUMENTS INCORPORATED BY REFERENCE: None.

      Transitional Small Business Disclosure Format (check one):  Yes [   ]        No [X]
</TABLE>

691751.10


<PAGE>

                                     PART I

Item 1.  Business.

      Background.  Ranger  Industries,  Inc.,  a  Connecticut  corporation  (the
"Registrant") was organized in 1961, as the successor to the Connecticut Leather
Company,  which was founded in 1932.  From 1961 through 1990, the Registrant was
known as "Coleco Industries,  Inc." The Registrant's principal executive offices
are  located  at One  Regency  Drive,  Bloomfield,  Connecticut  06002,  and its
telephone number is (860) 726-1208.

      In 1988, the Registrant,  then known as Coleco  Industries,  Inc., filed a
voluntary  petition in bankruptcy,  and in 1990, a plan of  reorganization  (the
"Plan") was approved by the bankruptcy court and became effective as of February
28, 1990 (the  "Effective  Date"),  and the  Registrant  emerged from Chapter 11
pursuant thereto. In accordance with the Plan:

           (i)  the Registrant emerged from the Chapter 11 proceeding with
                $950,000 in cash and no liabilities,

           (ii) $5.5 million was transferred to a product liability trust (the
                "Product Liability Trust"), to process and liquidate product
                liability claims pending or arising after May 15, 1990, and

           (iii)all other assets were transferred to a reorganization trust (the
                "Reorganization Trust"), which was responsible for collecting
                and liquidating the Registrant's other assets and distributing
                them to the Registrant's former creditors in accordance with the
                Plan.

The Reorganization Trust completed its collection,  liquidation and distribution
of assets in May, 1996 and was  terminated by order of the  bankruptcy  court on
August 27, 1996.

      The Product  Liability Trust contains assets of approximately  $12 million
as of December 31, 1997.  Under the terms of the Product  Liability  Trust,  the
residual funds,  if any,  remaining after the application of Trust assets to pay
product  liability claims and expenses would be distributed to the Registrant on
February 28, 2020. The bankruptcy  court,  in its  discretion,  is authorized to
permit an earlier  distribution to the  Registrant.  The Registrant may apply to
the bankruptcy court for termination of the Product Liability Trust earlier than
originally  scheduled  (i.e.,  prior to February 28, 2020),  but there can be no
assurance that such application will be successful,  or that the Registrant will
otherwise  receive any  distribution of assets from the Product  Liability Trust
prior to 2020, if ever.

      As of December 31, 1997,  the  Registrant  had adjusted net operating loss
carryforwards  ("NOL's)  of  approximately  $192  million.  The  NOL's  resulted
principally from operating losses

691751.10
                                       -1-

<PAGE>



sustained  by the  Registrant  prior  to 1990.  See  Note 6 of the  Notes to the
Consolidated  Financial Statements for an explanation of the possible utility of
these NOL's.

      Under  management  that was  installed  under the Plan,  which  management
remained in control of the  Registrant  through  July 29, 1997,  the  Registrant
pursued the  business of  acquiring  investments,  but that effort  proved to be
unsuccessful.

      Recent Developments. During 1997, Pure Group, Inc., a Delaware corporation
("PGI") wholly owned by one of the Registrant's  current  directors,  engaged in
and won a proxy  contest for  control of the  Registrant.  The current  Board of
Directors,  who were the  nominees of PGI in the proxy  contest,  took office on
July  29,  1997,  pursuant  to a  settlement  agreement  dated  that  date  (the
"Settlement  Agreement") among PGI, the former members of the Registrant's Board
of Directors, and the Registrant. Thereafter, they were elected as the directors
of the Registrant at the Annual Meeting of  Shareholders  of the Registrant that
was held on August 11, 1997.  The  Registrant  had not held an annual meeting of
shareholders at any time since 1990.

      In May 1997, the trustee of the Reorganization  Trust notified  management
then in office that he had received a  distribution  of  approximately  $800,000
from a bankruptcy  proceeding in which the Registrant had filed a claim in 1983,
which  claim  the  Registrant  apparently  wrote off as  worthless  prior to the
conclusion of the  Registrant's  bankruptcy  proceeding in 1990.  The Registrant
received  the  payment of the  $800,000 in October  1997.  At the time that such
payment was received,  the Company had no other material  liquid  assets.  As of
December  31, 1997,  the Company had liquid  assets of  approximately  $785,000,
substantially all of it attributable to the aforesaid distribution.

      As of March 31, 1997,  the Registrant had cash on hand of less than $5,000
and no other  financial  resources.  In connection  with the proxy contest,  PGI
agreed to lend the Registrant  certain funds necessary for the call of an annual
meeting of shareholders. Under the Settlement Agreement, PGI lent the Registrant
approximately  $197,000,  and thereafter,  PGI lent the Registrant an additional
$267,000.  The loans were demand loans bearing  interest at 2 percentage  points
above the prime rate. In March 1998, PGI and the  Registrant  exchanged the full
balance of such debt,  plus  interest,  for  788,644  shares of  authorized  but
theretofore   unissued  common  stock.  As  a  result  thereof,  PGI  now  holds
approximately  24% of all  outstanding  common  stock  of  the  Registrant.  The
exchange  enabled  the  Registrant  to  conserve  its cash for  other  corporate
purposes. See Item 12, Certain Relationships and Related Transactions.


Item 2.    Properties.

      As of the  Effective  Date of the Plan,  the  Registrant  had no  material
properties,  and it has acquired none since then. The  Registrant  currently has
the use of office space in Bloomfield,

691751.10
                                       -2-

<PAGE>



Connecticut. The Registrant's business records, to the extent not discarded, are
stored in a public warehouse

Item 3.    Legal Proceedings.

      None.

Item 4.    Submission of Matters to a Vote of Securities Holders.

      Inapplicable.




691751.10
                                       -3-

<PAGE>



                                     PART II

Item 5.    Market for Common Equity and Related Shareholder Matters.

      The Common Stock is traded over the counter and quotes have been  reported
by the OTC  Bulletin  Board since  February  2, 1997.  The table set forth below
reports  the high  and low  closing  bid  quotations  as  compiled  by  National
Quotation  Bureau,  LLC, of New York, New York, for each calendar quarter in the
last two complete fiscal years,  and for the first quarter of the current fiscal
year,  through the date indicated.  The quotations reflect  interdealer  prices,
without  retail  markups,  markdowns  or  commissions  and may  not  necessarily
represent actual transactions.


                                              High Bid                Low Bid
1996 - 1st Quarter                             $0.0938                $0.0625
1996 - 2nd Quarter                              0.0938                 0.0938
1996 - 3rd Quarter                              0.0938                 0.0938
1996 - 4th Quarter                              0.2800                 0.0938
1997 - 1st Quarter                              1.1875                 0.2500
1997 - 2nd Quarter                              1.7500                 0.3125
1997 - 3rd Quarter                              1.0625                 0.4375
1997 - 4th Quarter                              1.5000                 0.6250
1998 - 1st Quarter                              0.8125                 0.4063
(through March 17)


      The number of registered holders of the Common Stock as of March 23, 1998,
was approximately 1,000.

      The Registrant has not paid any cash dividends on its stock since 1974 and
has no expectation of doing so in the foreseeable future.

Item 6. Management's Discussion and Analysis of Financial Condition or Plan of
        Operation.

      The  following  discussion  should  be read in  conjunction  with  Item 1,
Business,  and  the  Consolidated  Financial  Statements,  including  the  Notes
thereto.

      Overview.  The Registrant emerged from a Chapter 11 bankruptcy  proceeding
in 1990 with $950,000 in cash and no liabilities. In the years from 1990 through
1996, the Registrant's only

691751.10
                                       -4-

<PAGE>



material  source of revenue was interest on the its cash,  and  expenses  always
exceeded  earnings.  As of December  31,  1996,  the  Registrant  had a retained
deficit of  approximately  $1,046,000.  In the view of current  management,  the
business plans of former management were not successful,  in that the Registrant
now has no business,  and no material financial  resources other than on account
of the receipt of approximately  $800,000 in the fourth quarter of 1997, arising
from a bankruptcy claim filed by the Registrant in 1983.

      As a result of the receipt of $800,000  in the last  quarter of 1997,  the
Registrant now has sufficient  liquidity to meet its current operating  expenses
for the foreseeable  future.  The  Registrant's  cash on hand was  approximately
$770,000 as of March 12, 1998, and the  Registrant's  projected  operating costs
and expenses for the fiscal year ending  December  31, 1998,  are  approximately
$75,000.  Average  annual  operating  expenses  in the  years  1994 - 1996  were
approximately  $174,000.  Operating expenses in 1997 were  substantially  higher
than in the prior years because of the expenses  incurred in connection with the
proxy contest.

      Business  Plans,  Liquidity  and  Financial  Resources.  The  Registrant's
financial  resources at the present time, other than its cash on hand, are (i) a
remainder  interest in the Product Liability Trust which would become payable to
the Registrant, if ever, in 2020, and (ii) the possible utility of net operating
loss carryforwards of approximately $192 million.

      Product  Liability  Trust.  The  Product  Liability  Trust  processes  and
liquidates product liability claims asserted and makes  distributions to holders
of settled or adjudicated  claims.  The trust contained  assets of approximately
$12 million as of December  31, 1997.  Under the terms of the Product  Liability
Trust,  the residual  funds, if any,  remaining after  distribution of all Trust
assets to pay product  liability claims and expenses would be distributed to the
Registrant on February 28, 2020. The bankruptcy court is authorized to permit an
earlier payout in its discretion, and the Registrant may apply to the bankruptcy
court seeking early termination of the Trust. See Item 1, Business.

      NOL'S. In the past, the NOL's sheltered the  Registrant's  modest interest
income,  and the  income  of the  Product  Liability  Trust  and,  before it was
terminated, the Reorganization Trust. The income of the Product Liability Trust,
if any,  continues to be taxable to the  Registrant.  As more fully discussed in
the Notes to the Financial Statements,  the continuing availability of the NOL's
is uncertain.

      Changes in Financial  Condition.  The Registrant's  financial condition is
set forth in the  Consolidated  Balance Sheets as of December 31, 1997 and 1996.
The changes in financial  condition  between the two dates resulted  mainly from
the receipt of approximately $800,000 from an old claim against a former account
debtor. See "Overview" and "Business Plans,  Liquidity and Financial  Resources"
above.

      Substantially all cash used by the Registrant in 1997 was provided by PGI,
and the  Registrant  was indebted to PGI, as of December 31, 1997, in the amount
of $478,117. As described in Item

691751.10
                                       -5-

<PAGE>



1, in March  1998 PGI and the  Registrant  exchanged  the debt owed to PGI as of
February 20, 1998, for 788,644 shares of the Registrant's common stock.

Item 7.    Financial Statements.

      See the "Index to Consolidated  Financial Statements and Schedules," which
appears on page F - 1 hereof.

Item 8.   Changes in and  Disagreements  with  Accountants on Accounting and
          Financial Disclosure.

           Inapplicable.


                                    PART III

Item 9.  Directors,  Executive  Officers,  Promoters and Control  Persons;
         Compliance with Section 16(a) of the Exchange Act.

      The following table sets forth the names, ages and business backgrounds of
the Registrant's  executive officers and directors,  together with all positions
and offices held with the Registrant by such  executive  officers and directors.
All executive officers and directors first took office on July 29, 1997:


<TABLE>
<CAPTION>
<S>                                <C>
Name, Age and Office               Business Background

Morton E. Handel, 62,              President of S&H Consulting, Ltd., a privately held investment and
Chief Executive Officer,           consulting firm.  Director and chairman of the Audit Committee of
President and Director             CompUSA, a publicly held retailer of computer hardware,
                                   software, and accessories; director and
                                   chairman of the Audit Committee of Ithaca
                                   Industries, Inc., a publicly held
                                   manufacturer of underwear and hosiery;
                                   director of Toy Biz, Inc., a publicly held
                                   manufacturer, importer and distributor of
                                   toys; director of Concurrent Computer
                                   Corporation, a manufacturer of real-time
                                   computers and computer systems.

Isaac Perlmutter, 54,              Independent investor; sole shareholder of Pure Group,
Inc.; Director                     director and major shareholder of Toy Biz, Inc., a publicly held
                                   manufacturer, importer and distributor of toys.

Raymond Minella, 48,               Principal of Berenson, Minella & Company, an investment
banking Director firm.
</TABLE>


691751.10
                                       -6-

<PAGE>



Item 10.        Executive Compensation.

      Executive  Officers.  In the three fiscal  years ended  December 31, 1997,
1996 and 1995,  the only  executive  officer of the  Registrant who received any
salary or other  compensation  from the  Registrant  was Mr. James B. Rubin,  as
follows:
<TABLE>
<CAPTION>
<S>                                                                 <C>                                <C>

                                                                     Fiscal year ended                  Total annual
Name and Positions                                                     December 31,                     compensation
James T. Rubin, President and Director                                     1997                             $17,888*
                                                                           1996                               50,000
                                                                           1995                               50,000

*     For the period from January 1 through July 29, 1997, only.

      The Registrant's  current  executive  officer,  Mr. Morton E. Handel,  has
served from July 29, 1997, to date without any compensation.

      Compensation  of  Directors.  Each  director of the  Registrant is paid an
attendance  fee of $500 for each  regular  or  special  meeting  of the Board of
Directors which he attends, in person or by telephone.

Item 11.        Security Ownership of Certain Beneficial Owners and Management.

      The following  table lists all persons who have reported to the Securities
and  Exchange  Commission  their  beneficial  ownership  of more  than 5% of the
Registrant's Common Stock, and all directors and officers of the Registrant,  as
of March 23, 1998:


Name and Address of Beneficial Owner                                            Number of Shares            Percentage1
Morton E. Handel, President and Director                                                 198,167                   4.1%
Massachusetts Financial Services Company                                                 398,930                   8.3%
Isaac Perlmutter, Director2                                                            1,146,137                  23.9%
All directors and officers as a group3                                                 1,344,304                  28.1%
===================================================================== ==========================  =====================
</TABLE>


1.    All percentages have been determined using the number of shares of the
      Registrant's common stock outstanding as of March 23, 1998, i.e.,
      4,788,644 shares.


691751.10
                                                        -7-

<PAGE>



2.    Consists of 1,112,100 shares owned by PGI, which is wholly owned by Mr.
      Perlmutter, and 34,037 shares owned by another corporation wholly owned by
      Mr. Perlmutter.

3.    Consists of shares beneficially owned by Mr. Handel and by Mr. Perlmutter.
      Mr. Minella does not own any shares of the Registrant.


Item 12.        Certain Relationships and Related Transactions.

      From time to time in 1997,  PGI (which is wholly owned by Mr.  Perlmutter,
who became a director of the  Registrant on July 29, 1997)  advanced funds to or
for the benefit of the Registrant,  and as of July 29, 1997, the balance of such
advances stood at approximately  $197,000.  Prior management agreed on behalf of
the  Registrant  to repay such  advances on demand,  and to pay  interest on the
outstanding  balance at the rate of 2  percentage  points  over the prime  rate,
compounded  monthly.  Advances  made after July 29, 1998,  were made on the same
terms and conditions as provided for the advances made prior to Mr. Perlmutter's
election as a director.  No cash  payments of principal or interest were made on
such indebtedness in 1997, and as of February 20, 1998, the outstanding  balance
of principal and interest was $483,616.  On March 9, 1998, the Registrant agreed
to exchange  788,644 shares of its authorized but  theretofore  unissued  Common
Stock  for the  $483,616  of debt due PGI.  The  value  per  share  used for the
purposes of the  exchange was  $0.6211,  which was the  weighted  average of the
closing price of shares traded for the 30-day period prior to February 20, 1998.

      Throughout  1996, and the period from January 1 through July 28, 1997, the
Registrant had a management  services agreement with M.D. Sass Associates,  Inc.
("Sass"),  of which the Registrant's  president  throughout in such periods, Mr.
James B. Rubin, was a Senior Managing Director. The Registrant incurred costs of
$19,200 payable to Sass in 1996, and $9,600 in 1997.


                                     PART IV

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

         (a)  Exhibits.  The exhibits that are part of this report are listed in
the Exhibit Index at the end of this report.

         (b)  Reports on Form 8-K.  In the last  quarter of the year  covered by
this Report,  the Registrant filed one Current Report on Form 8-K, dated October
9, 1997, reporting information under Item 5, Other Events.

691751.10
                                       -8-

<PAGE>



                                   SIGNATURES


      Pursuant  to the  requirements  of Section  13 or 15(d) 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.

                                Ranger Industries, Inc.



March 23, 1997                           s/ Morton E. Handel
                                ----------------------------
                                         Morton Handel, President and Chief
                                         Executive Officer

      Pursuant to the requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.



March 23, 1998                   /s/ Morton Handel
                                 Morton Handel, President, Acting Chief
                                 Financial Officer, Acting Principal
                                 Accounting Officer, and Director


March 23, 1998                   /s/ Raymond Minella
                                 Raymond Minella, Director


March 23, 1998                   /s/ Isaac Perlmutter
                                 Isaac Perlmutter, Director



691751.10
                                       -9-

<PAGE>



                    RANGER INDUSTRIES, INC. AND SUBSIDIARIES
                   Index to Financial Statements and Schedules
<TABLE>
<CAPTION>
<S>                                                                                                           <C>

                                                                                                               Page

Report of Independent Accountants...............................................................................F-2

Consolidated Balance Sheets as at December 31, 1997 and 1996....................................................F-3

Consolidated Statements of Operations and Retained Deficit for the years ended
                  December 31, 1997 and 1996....................................................................F-4

Consolidated Statements of Cash Flows for the years ended December 31,1997 and
                  1996..........................................................................................F-5

Notes to Consolidated Financial Statements......................................................................F-6
</TABLE>


Schedules not included herein have been omitted because they are not applicable
or the required information is shown in the Consolidated Financial Statements or
Notes thereto.

691751.10
                                       F-1

<PAGE>

 REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of
  Ranger Industries, Inc.
  (formerly Coleco Industries, Inc.):

We  have  audited  the  accompanying   consolidated  balance  sheets  of  Ranger
Industries,  Inc. and  Subsidiaries  as of December  31, 1997 and 1996,  and the
related  consolidated  statements  of operations  and retained  deficit and cash
flows for the years then ended. These consolidated  financial statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the consolidated financial position of Ranger Industries,
Inc. and  Subsidiaries  as of December 31, 1997 and 1996,  and the  consolidated
results of their  operations  and their cash flows for the years then ended,  in
conformity with generally accepted accounting principles.




COOPERS & LYBRAND L.L.P.

/s/
Hartford, Connecticut
March 19, 1998



                                       F-2

<PAGE>




                             RANGER INDUSTRIES, INC.
                       (formerly Coleco Industries, Inc.)

                           CONSOLIDATED BALANCE SHEETS

                           December 31, 1997 and 1996
                                     -------


                                     ASSETS
<TABLE>
<CAPTION>
<S>                                                         <C>                 <C>

                                                                     1997               1996
                                                                     ----               ----

Current assets:
  Cash and equivalents                                           $ 784,800      $      43,009
  Bad debt recoveries receivable                                    -                  2,931
  Prepaid expenses                                                  -                  1,044
  Income tax receivable                                              3,446              -
                                                              ----------------      ----------

        Total assets                                             $ 788,246      $     46,984
                                                                                      =========    ==============


                                  LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
  Accounts payable and other liabilities                       $   19,918       $    68,336
  Accrued interest payable                                         16,337            -
  Note payable to Pure Group, Inc.                                196,477            -
  Other amounts owed to Pure Group, Inc.                          265,303             -
                                                               ------------     -------------


        Total liabilities                                         498,035            68,336
                                                               ----------       ----------


Stockholders' equity (deficit):
  Common stock - $.01 par value, 20,000,000
    shares authorized, 4,000,000 shares
    issued and outstanding                                         40,000            40,000
  Capital in excess of par value                                  985,000           985,000
  Retained deficit                                               (734,789)       (1,046,352)
                                                               ----------       -----------
        Total stockholders' equity (deficit)                      290,211           (21,352)
                                                               ----------       -----------

        Total liabilities and stockholders' equity              $ 788,246       $    46,984
                                                                =========       ===========
</TABLE>


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

                                       F-3

<PAGE>




                             RANGER INDUSTRIES, INC.
                       (formerly Coleco Industries, Inc.)

           CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED DEFICIT

                 for the years ended December 31, 1997 and 1996
                                     -------

<TABLE>
<CAPTION>
<S>                                                              <C>            <C>

                                                                       1997             1996
                                                                       ----             ----

Net sales                                                          $     -       $         -

Operating costs and expenses:
  Administrative expenses                                               111,697           135,367
  Legal expenses                                                        111,243            42,072
  Proxy contest and annual meeting expenses                             251,781            -

Other income and expenses:
  Bad debt recoveries income                                            802,160             6,245
  Interest expense                                                      (16,337)           -
  Interest income                                                         8,861               497
                                                                ---------------  ----------------
    Income (loss) before income taxes                                   319,963          (170,697)
                                                                  -------------     -------------

Provision (benefit) for income taxes                                      8,400           (30,000)
                                                                ---------------    --------------

    Net income (loss)                                                   311,563          (140,697)

Retained deficit, beginning of year                                  (1,046,352)         (905,655)
                                                                   ------------     -------------

Retained deficit, end of year                                      $   (734,789)      $(1,046,352)
                                                                   ============       ===========


Basic earnings (loss) per  share                                   $       .08       $      (.04)
                                                              ================     ==============

</TABLE>

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

                                       F-4

<PAGE>


                             RANGER INDUSTRIES, INC.
                       (formerly Coleco Industries, Inc.)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                 for the years ended December 31, 1997 and 1996
                                     -------

<TABLE>
<CAPTION>
<S>                                                                                  <C>                 <C>

                                                                                        1997               1996
                                                                                        ----               ----

Cash flows from operating activities:
    Net income (loss)                                                                  $311,563         $(140,697)
                                                                                       --------         ---------
    Adjustments to reconcile net income (loss) to net cash
      provided by (used in) operating activities:
         Receivable from the Reorganization Trust                                        -                  1,939
         Bad debt recoveries receivable                                                   2,931            (2,931)
         Prepaid expenses                                                                 1,044            16,456
         Income tax receivable                                                           (3,446)              508
         Interest receivable                                                             -                     48
         Accounts payable, accrued liabilities and interest payable                     (32,081)           25,406
                                                                                     ----------       -----------
              Total adjustments                                                         (31,552)           41,426
                                                                                     ----------       -----------

              Net cash provided by (used in) operating activities                       280,011           (99,271)
                                                                                      ---------       -----------

Cash flows from financing activities:
    Distribution from reorganization trust                                               -                 75,000
    Proceeds from note payable to Pure Group, Inc.                                      196,477            -
    Other proceeds from Pure Group, Inc.                                                265,303            -
                                                                                      ---------  -----------
              Net cash provided by financing activities                                 461,780            75,000
                                                                                      ---------       -----------

Net increase (decrease) in cash and cash equivalents                                    741,791           (24,271)

Cash and cash equivalents at beginning of year                                           43,009            67,280
                                                                                     ----------       -----------

Cash and cash equivalents at end of year                                               $784,800        $   43,009
                                                                                       ========        ==========


Supplemental disclosures of cash flow information: Cash paid during the year
    for:
      Income taxes                                                                    $  13,324       $     1,965
                                                                                      =========       ===========

</TABLE>


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

                                       F-5

<PAGE>




                             RANGER INDUSTRIES, INC.
                       (formerly Coleco Industries, Inc.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1.    Organization:

       In July 1988, Ranger Industries, Inc. (the "Registrant" or the "Company",
       and then known as Coleco Industries,  Inc.) filed a voluntary petition in
       United States Bankruptcy Court under Chapter 11 of the Federal Bankruptcy
       Code.  Effective  February 28, 1990, the bankruptcy court approved a plan
       of  reorganization  (the "Plan"),  pursuant to which all then outstanding
       debt and equity securities of the Registrant were canceled, and 4,000,000
       shares of the  Registrant's new $0.01 par value common stock (the "Common
       Stock") were  distributed  to the unsecured  creditors.  On the Effective
       Date of the Plan,  the Registrant  retained  $950,000 in cash for working
       capital  purposes and was expected to engage in the business of acquiring
       income  producing  properties  or  businesses.  

       The Plan provided for the creation of a Reorganization  Trust in order to
       liquidate the  Registrant's  remaining assets (other than the $950,000 in
       cash retained by the Registrant) and effectuate  distributions thereof to
       the  Registrant's  creditors.  The  Reorganization  Trust  completed  the
       distribution  of its assets in May,  1996 and was  terminated by order of
       the  bankruptcy  court on August 27, 1996. 

       The Plan also provided for the creation of a Product  Liability  Trust in
       order to settle certain personal injury claims  (including claims arising
       thereafter) against the Registrant. The Product Liability Trust continues
       to process and liquidate certain product  liability  claims.  Pursuant to
       the terms of the Product  Liability Trust  Agreement,  residual funds, if
       any,  will revert to the  Registrant,  as grantor of the trust,  upon the
       earlier of (a) February 28, 2020, or (b) approval by the bankruptcy court
       of earlier termination of the Product Liability Trust.

2.    Change In Control:

       Following  the   conclusion  of  a  hostile  proxy  contest  (the  "Proxy
       Contest"),  initiated  by Pure  Group,  Inc.  ("PGI")  during  the second
       quarter of 1997, the Company's former  directors  resigned from the Board
       of Directors effective July 29, 1997, and new directors were elected. The
       terms  under which this  change in control  took place are  outlined in a
       settlement agreement dated July 29, 1997 between PGI, the Company and the
       Company's former directors (the "Settlement Agreement").  Under the terms
       of the Settlement Agreement, and as set forth in a demand promissory note
       dated July 29,  1997,  PGI loaned the  Company  $196,477  to pay its then
       outstanding obligations. The note requires the Company to pay interest to
       PGI at two  percentage  points above the prime rate (8.5% at December 31,
       1997).  Additionally,  PGI loaned the  Company  $251,780  to cover  costs
       incurred in  connection  with the Proxy  Contest,  including the costs of
       holding the 1997 annual meeting and $13,523 for working capital purposes.
       These additional loans of $265,303 are subject to the same terms outlined
       in the demand promissory note. Also, see Note 10.

                                      F-6
<PAGE>


                             RANGER INDUSTRIES, INC.
                       (formerly Coleco Industries, Inc.)

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued







    3. Summary of Significant Accounting Policies:

       The  consolidated  financial  statements  have  been  prepared  using the
       accrual basis of accounting.  The preparation of financial  statements in
       conformity  with  generally  accepted   accounting   principles  requires
       management  to make  estimates and  assumptions  that affect the reported
       amounts of assets and liabilities and disclosure of contingent assets and
       liabilities  at the date of the  financial  statements  and the  reported
       amounts of revenues  and expenses  during the  reporting  period.  Actual
       results could differ from those estimates.

       Certain amounts from 1996 have been reclassified to conform with the 1997
       presentation.

       Income

       The only source of income is interest  income and the recovery of certain
       bad debts.

       Expenses

       Expenses  of the  Company  consist of  professional  fees and other costs
       incurred  in  connection  with  the  Company's  filing  requirements  and
       interest.

       Earnings Per Share

       In 1997, the Company  adopted  Statement of Financial  Standards No. 128,
       "Earnings Per Share".  This  pronouncement had no impact on the Company's
       consolidated  financial  position,  results of operating,  or cash flows.
       Basic  earnings  (loss) per share  were  computed  based on the  weighted
       average  number  of shares of  common  shares  outstanding.  There are no
       dilutive securities  outstanding and, as such, basic and diluted earnings
       per share are the same.  Weighted average common shraes  outstanding were
       4,000,000  shares  during  1997  and  1996 As  discussed  in Note 1,  all
       previously  existing debt and equity securities were canceled on February
       28, 1990.

       Cash and Cash Equivalents

       Cash equivalents  consist of short-term highly liquid investments with an
       original maturity, when purchased, of three months or less.

    4. Bankruptcy Claim Recovery:

       On October 9, 1997, the Company received  $802,160 as a distribution on a
       bankruptcy claim filed by the Company's predecessor in 1983.

                                      F-7
<PAGE>


                             RANGER INDUSTRIES, INC.
                       (formerly Coleco Industries, Inc.)

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued


    5.  Income Taxes:

        Effective  January 1, 1993, the Company  adopted  Statement of Financial
        Accounting  Standards  No. 109,  "Accounting  for Income  Taxes"  ("SFAS
        109").  SFAS 109 requires  recognition of deferred tax  liabilities  and
        assets for the expected future tax consequences of events that have been
        included in the financial  statements or income tax returns.  Under this
        method,  deferred tax liabilities and assets are determined based on the
        difference  between the financial  statement and tax bases of assets and
        liabilities  using enacted tax rates in effect for the year in which the
        differences  are expected to reverse.  In addition,  deferred tax assets
        are subject to a valuation  allowance  to reduce them to net  realizable
        value.

        As  discussed  in Note 1, the assets  and  liabilities  of the  Company,
        except  for  $950,000  retained  for  working  capital  purposes,   were
        transferred  to  the   Reorganization   and  Product  Liability  Trusts,
        respectively,  effective February 28, 1990, in accordance with the Plan.
        Although  the  matter is not free from  doubt,  these  Trusts  have been
        treated  as  grantor  trusts.   Accordingly,   taxable  income  or  loss
        associated  with  the  disposition  of  assets  and  the  settlement  of
        liabilities by the Trusts are reflected on the federal income tax return
        of Ranger Industries, Inc., although such assets and liabilities are not
        presented in these consolidated financial statements (also see Note 6).

        Tax expense or benefit is  attributable  to Federal and state taxes due,
        partially  offset, in 1996, by amounts due under a tax sharing agreement
        between Ranger Industries, Inc. and the Reorganization Trust whereby the
        Trust reimbursed Ranger for taxes paid in certain states.

        At December  31, 1997 and 1996,  it was  estimated  that the Company had
        adjusted tax net operating loss  carryforwards  and future deductions of
        approximately  $192  million  after  giving  effect  to the Plan and the
        transactions  contemplated  thereby,  which may be used to offset future
        taxable  income,  subject to  several  limitations,  and which  begin to
        expire in the year 2002.  These amounts include the tax  consequences of
        the activity of the Reorganization and Product Liability Trusts, as well
        as the  activity of Ranger  Industries,  Inc.  At December  31, 1997 and
        1996, the Company had Alternative  Minimum Tax (AMT) loss  carryforwards
        of  approximately  $168  million  which will begin to expire in the year
        2002. The Company also had  approximately  $7.7 and $13.1 million in tax
        credit carryforwards at December 31, 1997 and 1996, respectively. At the
        current  tax  rates,  the  taxable  income   equivalent  of  the  credit
        carryforwards is approximately $22.6 and $38.5 million, respectively.

        Under current tax laws,  the Internal  Revenue Code provides for certain
        limitations  following an  "ownership  change".  Accordingly,  under the
        confirmed  Plan of  Reorganization,  the continued  availability  of the
        Company's net operating loss  carryforwards and other tax attributes may
        be subject to substantial limitations (also see Note 6).

                                      F-8
<PAGE>


                             RANGER INDUSTRIES, INC.
                       (formerly Coleco Industries, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued


    5.  Income Taxes, Continued:

        At December  31,  1997 and 1996,  the only  remaining  book and tax base
        differentials  related to the claim settlement activities of the Product
        Liability  Trust.  Additionally,  any  deferred  tax asset  recorded  to
        recognize the tax net operating loss carryforwards would be subject to a
        full  valuation  allowance  under the  provisions  of SFAS  109,  due to
        uncertainty  of the  Company's  ability to  generate  taxable  income to
        utilize  the   carryforwards.   The   Company's  tax   liabilities   are
        attributable to state minimum taxes and federal alternative minimum tax.


    6.  Treasury Regulation:

        On January 6, 1992,  the  Department  of the  Treasury  promulgated  new
        Treasury  Regulations.  These  regulations  interpret Section 269 of the
        Internal Revenue Code which permits the Internal Revenue Service to deny
        corporations  the  ability to use tax  benefits,  such as net  operating
        losses  ("NOLs") where control of the  corporation  was acquired for the
        principal  purpose of avoiding  tax. The  regulations  provide that if a
        corporation  in  a  bankruptcy  reorganization  that  qualifies  for  an
        exemption  from the general rule limiting the use of net operating  loss
        carryforwards  does not carry on a significant amount of an active trade
        or business during and subsequent to such bankruptcy reorganization, the
        Internal  Revenue  Service  will  presume,  absent a  showing  of strong
        evidence  to  the   contrary,   that  the   principal   purpose  of  the
        reorganization was to evade or avoid Federal income tax and that Section
        269 should apply.  The regulations  are only effective,  by their terms,
        with respect to acquisitions of control of corporations  occurring after
        August  14,  1990  and,  accordingly,   they  do  not  apply  to  Ranger
        Industries,  Inc. 

        Despite the inapplicability of these regulations to Ranger, the issue of
        essentially  inactive  reorganized  companies  with  NOLs  that  survive
        bankruptcy intact has now been firmly raised in the eyes of the Internal
        Revenue Service.  Accordingly,  due to the Company's  disposition of its
        historic  toy  businesses  to Hasbro and the  Company's  switch to a new
        business of  acquiring  investments,  it is possible  that the  Internal
        Revenue  Service  may  assert  that the  Company  has not  carried  on a
        significant   trade  or   business   during   and   subsequent   to  its
        reorganization.  If such an assertion is made and ultimately  sustained,
        then the Company would be unable to utilize its  estimated  $192 million
        of net  operating  loss  carryforwards.  This  could  have a  materially
        adverse  effect on the Company's  ability to attract  outside  investors
        willing to invest in the  Company.  Notwithstanding  these  regulations,
        there  can be no  assurance  that the  Company  will be able to  attract
        sufficient outside  investment to allow it to continue to operate,  once
        its current  working  capital is depleted.  The  consolidated  financial
        statements  do not include any  adjustments  that might  result from the
        resolution of these uncertainties.

                                      F-9
<PAGE>


                            RANGER INDUSTRIES, INC.
                       (formerly Coleco Industries, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued


    7.  Related Party Transactions:

        The Company had an Agreement with M.D. Sass Associates, Inc. ("SASS") of
        which  James B.  Rubin is Senior  Managing  Director,  under  which SASS
        provided accounting,  administrative,  financial, legal, secretarial and
        other support  services at the Company's  request.  The Company incurred
        costs of $9,600 and $19,200 for these services for the each of the years
        ended December 31, 1997 and 1996,  respectively.  In connection with the
        change in control  described in Note 2, this  agreement was  terminated.
        All amounts owed to SASS in  connection  with this  agreement  were paid
        during the quarter  ended  September  30,  1997.  At December  31, 1996,
        $11,200 was owed to SASS in connection  with this  agreement.  Effective
        August 1, 1990, Mr. Rubin, as Chief Executive  Officer,  was entitled to
        an annual  salary of $50,000,  through the date of the change in control
        (see Note 2). All fees for his services  are included in  administrative
        expenses in the consolidated  financial statements.  All amounts owed to
        Mr. Rubin in connection with this agreement were paid during the quarter
        ended September 30, 1997. At December 31, 1996, $32,112, was owed to Mr.
        Rubin in connection with this agreement. Also, see Notes 2 and 10.

8.      Final Distribution from Ranger Industries, Inc. Reorganization Trust:

        As  described  in  Note 1,  the  Reorganization  Trust  made  its  final
        distribution  to  creditors on May 29,  1996.  On October 31, 1996,  the
        Company received a distribution of $75,000 from the Reorganization Trust
        representing  substantially  all  of  the  funds  then  expected  to  be
        disbursed to the Company from the Reorganization  Trust. This amount was
        reflected as an adjustment to the original capitalization of the Company
        and  accordingly,  is  included  in  capital  in  excess of par value at
        December 31, 1997 and 1996.


    9.  Recently Issued Accounting Pronouncements:

        In 1998,  the  Company  will adopt  Statement  of  Financial  Accounting
        Standards  No.  130,  "Reporting  Comprehensive  Income",  and No.  131,
        "Disclosures  About Segments of and Enterprise and Related  Information,
        which  are  effective  for  financial   statements  issued  for  periods
        beginning  after December 15, 1997. When adopted,  these  pronouncements
        will  not  have  any  effect  on the  Company's  consolidated  financial
        position, results of operations, or cash flows.

                                      F-10
<PAGE>


                             RANGER INDUSTRIES, INC.
                       (formerly Coleco Industries, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued







    10. Subsequent Event:

        On March 9, 1998,  the  Company  issued  788,644  shares of its $.01 par
        value common stock in exchange for the  cancellation  of the amount owed
        to PGI as of February 10, 1998. The exchange value of  $.6211/share  was
        determined  using the  weighted  average  of the  closing  prices of the
        Company's common stock for the 30-day period prior to February 20, 1998.



                                      F-11
<PAGE>


                                  EXHIBIT INDEX

The following exhibits are a part of this report. All such exhibits are
incorporated herein by reference to other documents on file with the Securities
and Exchange Commission, except those marked with an asterisk.

<TABLE>
<CAPTION>
<S>                 <C> 
    Exhibit No.      Description
3.1                  Amended and restated certificate of incorporation of the Registrant,
                     incorporated herein by reference to the Registrant's Annual Report on Form 10-
                     K for the year ended December 31, 1989, SEC File No. 1-5673.
3.2                  Amended and restated by-laws of the Registrant, incorporated herein by
                     reference  to the Registrant's Annual Report on Form 10-KSB for year ended
                     December 31, 1994, SEC File No. 1-5673.
10.1                 Settlement agreement dated July 29, 1997, among the
                     Registrant, Pure Group, Inc., and Messrs. James B. Rubin,
                     James Berman and Duncan N. Darrow, incorporated herein by
                     reference to Exhibit IV of Amendment No. 4 dated July 29,
                     1997, of Schedule 13D filed by Pure Group, Inc., and
                     certain other persons with respect to ownership of the
                     Registrant's Common Stock.
21                   List of subsidiaries, incorporated herein by reference to
                     the Registrant's Annual Report on Form 10-KSB for the year
                     ended December 31, 1996.
27*                  Financial Data Schedule

</TABLE>

691751.10