<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q


(Mark One)
(X)     Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
        Exchange Act of 1934 for the quarterly period ended June 30, 2005.

( )     Transition report pursuant to Section 13 or 15(d) of the Securities
        Exchange Act of 1934 for the transition period ______ to ______.

                           Commission File No. 1-13925

                      CHAMPIONSHIP AUTO RACING TEAMS, INC.
                      ------------------------------------
             (Exact name of registrant as specified in its charter)

              Delaware                                       38-3389456
              --------                                       ----------
   (State or other jurisdiction of             (IRS Employer Identification No.)
   Incorporation or organization)

            5350 Lakeview Parkway Drive South, Indianapolis, IN 46268
            ---------------------------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (317) 715-4196
                                 --------------
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 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 [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 126-2 of the Securities Exchange Act). Yes [ ] No [X]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

        COMMON STOCK $0.01 PAR VALUE                14,718,134 SHARES
        ----------------------------                -----------------
           (class of common stock)           (outstanding at June 30, 2005)



                         This report contains 25 pages.



                                       1
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION                                                                   PAGE
<S>                                                                                              <C>
        ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                Consolidated Balance Sheets as of June 30, 2005 and
                December 31, 2004                                                                   3

                Consolidated Statements of Operations for the Three and Six Months
                Ended June 30, 2005 and 2004                                                        4

                Consolidated Statement of Stockholders' Equity for the Six Months
                Ended June 30, 2005                                                                 5

                Consolidated Statements of Cash Flows for the Six Months Ended
                June 30, 2005 and 2004                                                              6

                Notes to Consolidated Financial Statements                                          7


        ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS                                      11


        ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES                                           16
                ABOUT MARKET RISKS

        ITEM 4. CONTROLS AND PROCEDURES                                                            16


PART II - OTHER INFORMATION

        ITEM 1. LEGAL PROCEEDINGS                                                                  17

        ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                   17

SIGNATURES

CERTIFICATIONS

EXHIBITS
</TABLE>



                                       2
<PAGE>

                      CHAMPIONSHIP AUTO RACING TEAMS, INC.
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
           (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)


<Table>
<Caption>
                                                                                     June 30, 2005       December 31, 2004
                                                                                     -------------       -----------------
<S>                                                                                  <C>                 <C>
ASSETS
CURRENT ASSETS:
    Cash and cash equivalents                                                           $  5,128             $  5,459
    Accounts receivable (net of allowance for doubtful accounts of $2,116 at
    June 30, 2005 and December 31, 2004)                                                       8                    8
    Prepaid expenses and other current assets                                                180                  253
    Other                                                                                      3                    3
                                                                                        --------             --------
           Total current assets                                                            5,319                5,723
                                                                                        --------             --------
TOTAL ASSETS                                                                            $  5,319             $  5,723
                                                                                        ========             ========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
    Accounts payable                                                                    $     58             $    102
    Accrued liabilities:
      Payroll                                                                                 12                   13
      Professional fess and other                                                            181                   90
                                                                                        --------             --------
           Total current liabilities                                                         251                  205

COMMITMENTS AND CONTINGENCIES (NOTE 3)                                                        --                   --

STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value, 5,000,000 shares authorized, none issued
and outstanding at June 30, 2005 and December 31, 2004
Common stock $.01 par value, 50,000,000 shares authorized, 14,718,134 shares
issued and outstanding at June 30, 2005 and December 31, 2004                                147                  147
Additional paid-in capital                                                                87,765               87,765
Accumulated deficit                                                                      (82,844)             (82,394)
                                                                                        --------             --------
      Total stockholders' equity                                                           5,068                5,518
                                                                                        --------             --------
TOTAL LIABILITES AND STOCKHOLDERS' EQUITY                                               $  5,319             $  5,723
                                                                                        ========             ========

</TABLE>


See accompanying notes to unaudited consolidated financial statements



                                       3
<PAGE>

                      CHAMPIONSHIP AUTO RACING TEAMS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2005 AND 2004
                                   (UNAUDITED)
                      (IN THOUSANDS, EXCEPT LOSS PER SHARE)


<TABLE>
<CAPTION>
                                               THREE MONTHS ENDED                SIX MONTHS ENDED
                                                     JUNE 30,                        JUNE 30,
                                              2005            2004            2005            2004
                                            --------        --------        --------        --------
<S>                                         <C>             <C>             <C>             <C>
REVENUES:
 Other revenue                              $      -        $     47        $      2        $    104
                                            --------        --------        --------        --------
      Total revenues                               -              47               2             104

EXPENSES:
 Administrative and indirect expenses             96             596             483           2,767
                                            --------        --------        --------        --------

OPERATING LOSS                                   (96)           (549)           (481)         (2,663)
 Realized gain on sale of investments              -               5               -              13
 Interest income                                  30              28              56              59
                                            --------        --------        --------        --------
LOSS BEFORE INCOME TAXES                         (65)           (516)            425          (2,591)
 Income tax expense (benefit)                      -            (877)             25            (877)
                                            --------        --------        --------        --------
NET INCOME (LOSS)                           $    (65)       $    361        $   (450)       $ (1,714)
                                            ========        ========        ========        ========
NET INCOME (LOSS) PER SHARE:

              BASIC AND DILUTED             $   0.00        $   0.02        $  (0.03)       $  (0.12)
                                            ========        ========        ========        ========
WEIGHTED AVERAGE SHARES OUSTANDING:
              BASIC AND DILUTED               14,718          14,718          14,718          14,718
                                            ========        ========        ========        ========
</TABLE>

See accompanying notes to unaudited consolidated financial statements.



                                       4
<PAGE>

                      CHAMPIONSHIP AUTO RACING TEAMS, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                     FOR THE SIX MONTHS ENDED JUNE 30, 2005
                                   (UNAUDITED)
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                         COMMON STOCK              ADDITIONAL
                                  -------------------------          PAID-IN        ACCUMULATED      STOCKHOLDERS'
                                   SHARES           AMOUNT           CAPITAL          DEFICIT           EQUITY
                                  --------         --------         --------         --------          --------
<S>                               <C>              <C>              <C>              <C>               <C>
BALANCES, JANUARY 1, 2005           14,718         $    147         $ 87,765         $(82,394)         $  5,518
   Net loss                             --               --               --             (450)             (450)
                                  --------         --------         --------         --------          --------

BALANCES, JUNE 30, 2005             14,718         $    147         $ 87,765         $(82,844)         $  5,068
                                  ========         ========         ========         ========          ========
</TABLE>

See accompanying notes to unaudited consolidated financial statements.



                                       5
<PAGE>

                      CHAMPIONSHIP AUTO RACING TEAMS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
                                   (UNAUDITED)
                             (DOLLARS IN THOUSANDS)


<Table>
<Caption>
                                                                               2005              2004
                                                                             --------          --------
<S>                                                                          <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss                                                                $   (450)         $ (1,714)
     Adjustments to reconcile net loss to
           net cash used in operating activities:
           Bad debt                                                               450              (422)
           Accounts receivable                                                   (450)            1,500
           Income tax refundable                                                                   (882)
           Prepaid expenses and other assets                                       73               417
           Other                                                                   --               (13)
           Accounts payable                                                       (44)           (2,734)
           Accrued liabilities                                                     90               546
                                                                             --------          --------
                   Net cash used in operating activities                         (331)           (3,302)

CASH FLOWS FROM INVESTING ACTIVITIES:
     Proceeds from sale of investments                                             --             4,019
     Proceeds from sale of CART, Inc. assets, equipment and stock of
        subsidiary (net of cash sold)                                              --             3,039
                                                                             --------          --------
                Net cash provided by investing activities                          --             7,058

CASH FLOWS FROM FINANCING ACTIVITIES:
      Payments on notes payable                                                    --            (1,750)
                                                                             --------          --------
                Net cash used in financing activities                              --            (1,750)
                                                                             --------          --------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                             (331)            2,006
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                5,459             3,211
                                                                             --------          --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                   $  5,128             5,217
                                                                             ========          ========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
     Cash paid during the period for:
          Income taxes                                                       $     25          $     --
</Table>


See accompanying notes to unaudited consolidated financial statements.



                                       6
<PAGE>

                      CHAMPIONSHIP AUTO RACING TEAMS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        BASIS OF PRESENTATION. The accompanying unaudited consolidated financial
statements have been prepared by management and, in the opinion of management,
contain all adjustments, consisting of normal recurring adjustments, necessary
to present fairly the financial position of Championship Auto Racing Teams, Inc.
and subsidiaries (the "Company") as of June 30, 2005 and December 31, 2004, the
results of their operations for the three months and six months ended June 30,
2005 and 2004, the statement of stockholder's equity for the six months ended
June 30, 2005, and their cash flows for the six months ended June, 2005 and
2004.

        The unaudited consolidated financial statements should be read in
conjunction with the audited consolidated financial statements included in the
Company's Form 10-K for the year ended December 31, 2004, filed with the
Securities and Exchange Commission.

        ORGANIZATION. CART, Inc., ("CART") (a Michigan corporation) was
organized as a not-for-profit corporation in 1978, with its main purpose being
to promote the sport of automobile racing, primarily open-wheel type racing
cars. As of January 1, 1992, the entity became a for-profit corporation and
continued to use the CART name.

        In December 1997, Championship Auto Racing Teams, Inc., (a Delaware
corporation) was formed to serve as a holding company for CART and its
subsidiaries (the "Reorganization"). Each outstanding share of common stock of
CART was acquired in exchange for 400,000 shares of common stock of the Company.
References to the "Company" mean Championship Auto Racing Teams, Inc. and its
subsidiaries.

        On August 18, 2003, we publicly announced that we had received a
proposal from Open Wheel Racing Series ("Open Wheel") related to the acquisition
of the Company and that we were engaged in negotiations regarding a possible
transaction with Open Wheel.

        On August 24, 2003, we publicly announced that our board of directors
had instructed management to continue negotiating with Open Wheel with respect
to all terms related to a possible acquisition of the Company. The Company, Open
Wheel and their respective advisors continued to engage in negotiations
regarding the terms of a possible transaction and related definitive agreements.

        On September 10, 2003, representatives of the Company, Open Wheel and
Open Wheel Acquisition Corp., a wholly-owned subsidiary of Open Wheel, executed
and delivered the merger agreement and other related agreements and issued a
joint press release announcing the proposed transaction.

        On December 2, 2003, we announced that representatives of Open Wheel had
informed us that Open Wheel believed that a number of conditions of the pending
merger between the parties would not be satisfied by the time of the special
meeting of stockholders that was scheduled for December 19, 2003.

        On December 15, 2003, we announced that we had entered into an Asset
Purchase Agreement (the "Agreement") with Open Wheel. The Agreement would allow
Open Wheel to purchase the assets of CART, needed to operate the Champ Car World
Series and the stock of Pro-Motion Agency, Inc., our subsidiary that operates
the Toyota Atlantics series and CART Licensed Products, Inc., our subsidiary
that operates our licensed merchandise function. In addition, Open Wheel would
assume from us and CART, the rights and



                                       7
<PAGE>

obligations under certain promoter, sponsor and other contracts. Open Wheel
stated that it intended to continue to operate the Champ Car World Series and
the Toyota Atlantic series. The total consideration that would be paid under the
agreement was $3.0 million less $1.5 million in 2003 prize money to teams who
were not affiliated with Open Wheel; which was an obligation of CART that would
be assumed by Open Wheel. The Agreement terminated the previously announced
merger agreement that we had entered into with Open Wheel on September 10, 2003.

        On December 16, 2003, CART filed a petition under Chapter 11 of the U.S.
Bankruptcy Code in the United States Bankruptcy Court Southern District of
Indiana (RE CART, Inc., Case No. 03-23385-FJO-11).

        An Amendment by Interlineation (the "Amendment") with respect to the
Agreement was entered into on January 15, 2004 to reflect the change in
consideration and the assumption of certain claims.

        On February 13, 2004, the assets of CART, the stock of Pro-Motion
Agency, Inc. and CART Licensed Products, Inc., were sold to Open Wheel for total
cash consideration of $3.3 million, assumption of liabilities of $1.4 million in
2003 prize money to teams who were not affiliated with Open Wheel which was an
obligation of CART, forgiveness of $1.3 million in prize money due principals of
Open Wheel which was an obligation of CART and the assumption of certain
promoter, sponsor and other contracts, pursuant to an order of the bankruptcy
court at a hearing held on January 28, 2004.

        Upon completion of the sale of substantially all of our operating assets
to Open Wheel in February 2004, most of our employees resigned and accepted
employment with Open Wheel and we ceased operations. The Company currently has
two employees who are winding up the affairs of the Company; the Chief Executive
Officer and Chief Financial Officer.

        CART operated as debtor-in-possession under the Bankruptcy Code in order
to wind up its affairs. On August 3, 2004 CART, Inc. filed CART's Amended
Chapter 11 Plan (the "Plan") and the Second Amended Disclosure Statement For
Amended Chapter 11 Plan Of CART (the "Disclosure Statement") with the Bankruptcy
Court. The Plan provides for the distribution of the asset sale proceeds and
other currently available cash and the liquidation and distribution of the
remaining estate assets to CART's creditors. The Disclosure Statement was
approved as containing adequate information by the Bankruptcy Court on August 3,
2004. The hearing on the confirmation of the plan was held on September 13,
2004. On September 23, 2004, the Bankruptcy Court entered its Findings Of Fact,
Conclusions Of Law, And Order Under 11 U.S.C. Sections 1129(a) And (b) And Fed.
R. Bankr. P. 3020 Confirming CART's Amended Chapter 11 Plan.

        Pursuant to the "Plan" on November 18, 2004, the Company canceled its
stock in CART and all remaining CART assets and liabilities were transferred to
the CART Liquidating Trust ("CLT") to be held, pending allowance or disallowance
of disputed claims, and distributed to holders of allowed claims.

        We currently intend to liquidate our remaining assets, pay off our
remaining liabilities, and complete the process of liquidation and winding up
the Company's affairs as soon as practicable. Our Board of Directors has not
adopted a plan of liquidation and dissolution but will consider this option when
all material claims against the Company are resolved and paid and after approval
by our stockholders. In the event that our Board of Directors adopts a plan of
liquidation and dissolution, we would expect to incur liquidation expenses, in
addition to payments of ongoing operating expenses and settlement of existing or
potential obligations. Liquidation expenses may include, among others, employee
salaries and related costs, and legal and accounting fees. While we cannot
currently make a precise estimate of the expenses, we believe that a portion of
our current cash may be required to pay the above expenditures.



                                       8
<PAGE>

        The accompanying unaudited financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed above,
the Company's intention to liquidate the remaining assets, pay off the remaining
liabilities, and complete the process of liquidation and dissolution of the
Company's affairs raise substantial doubt about its ability to continue as a
going concern. The unaudited financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        PRINCIPLES OF CONSOLIDATION. For the three and six months ended June 30,
2004, the financial statements include the financial statements of Championship
Auto Racing Teams, Inc. and its wholly-owned subsidiaries - CART, Inc. (Debtor
in Possession) and Raceworks, LLC and through February 13, 2004, Pro-Motion
Agency, Ltd. and CART Licensed Products, Inc. For the three and six months ended
June 30, 2005, the financial statements include financial statements of
Championship Auto Racing Teams, Inc. and its wholly-owned subsidiary Raceworks,
LLC. All significant intercompany balances have been eliminated in
consolidation.

        BASIC AND DILUTED LOSS PER SHARE. Basic earnings per share is calculated
as net income loss divided by the weighted average number of shares of common
shares outstanding during the period. Diluted per share amounts assume the
exercise of shares issuable under certain stock option plans, when dilutive.

        STOCK BASED COMPENSATION. The Company has chosen to follow Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
("APB No. 25") in accounting for its stock options granted to employees and
directors. Under APB No. 25, the Company does not recognize compensation expense
on the issuance of its stock options because the option terms are fixed, and the
exercise price equals the market price of the underlying stock on the grant
date. The following illustrates the effect on net income (loss) if the Company
had applied the fair value recognition provisions of SFAS No. 123, "Accounting
for Stock-Based Compensation," as amended by SFAS No. 148, "Accounting for
Stock-Based Compensation-Transition and Disclosure":

<TABLE>
<CAPTION>
                          (In Thousands)
                                                                  Three Months Ended June 30,          Six Months Ended June 30,
                                                                     2005             2004               2005              2004
                                                                  ---------         ---------         ---------         ---------
<S>                                                               <C>               <C>               <C>               <C>
NET INCOME (LOSS)
-----------------

As reported                                                       $     (65)        $     361         $    (450)        $  (1,714)
Total stock-based employee compensation expense determined
    under the fair value based method, net of tax                         -              (358)                -              (778)
                                                                  ---------         ---------         ---------         ---------
Pro forma                                                         $     (65)        $       3         $    (450)        $  (2,492)
                                                                  =========         =========         =========         =========

DILUTED INCOME (LOSS) PER SHARE
-------------------------------

As reported                                                       $    0.00         $    0.02         $   (0.03)        $   (0.12)
Total stock-based employee compensation expense determined
    under the fair value based method, net of tax                         -             (0.02)                -             (0.05)
                                                                  ---------         ---------         ---------         ---------
Pro forma                                                         $    0.00         $    0.00         $   (0.03)        $   (0.17)
                                                                  =========         =========         =========         =========
</TABLE>

All outstanding stock options were voluntarily forfeited as of March 31, 2005.

        MANAGEMENT ESTIMATES. The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of
America 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



                                       9
<PAGE>

during the reporting period presented. The actual outcome of the estimates could
differ from the estimates made in the preparation of the consolidated financial
statements.

3. COMMITMENTS AND CONTINGENCIES

                LITIGATION. On November 4, 2003, 88 Corp. filed suit against
CART, Inc. in the United States Federal District Court for the Central District
of California. 88 Corp., the promoter of the CART Champ Car World Series race at
the California Speedway in Fontana, California, claimed that the race, which was
to be held on November 2, 2003, was canceled due to a "force majeure" and
requested a judicial determination as to whether the organizational and rights
fee of $2.5 million, previously paid by 88 Corp. to CART, minus reasonable
expenses incurred by CART, should be refunded to 88 Corp. As a result of the
bankruptcy of CART, this litigation was suspended. 88 Corp. has filed a proof of
claim against CART in the bankruptcy court proceedings requesting repayment of
the $2.5 million, imposition of a constructive trust, and such other relief as
the bankruptcy court deems appropriate. CART has objected to the claim and has
asserted against 88 Corp. a claim for wrongful termination of the sanction
agreement as it relates to the 2003 and 2004 races in the amount of $5.2
million. At the time the CART stock was canceled and its assets and liabilities
were placed in the CLT, the Company was unable to make a determination as to the
likelihood of an unfavorable outcome or estimate the amount or range of the
recovery or loss. On April 27, 2005, CLT entered into a settlement agreement
with 88 Corp. in which CLT agreed to pay 88 Corp. $1.7 million. The settlement
was subject to approval by the bankruptcy court. On May 10, 2005, the bankruptcy
court approved the settlement.

        In connection with CART's bankruptcy filing, based upon filings by
creditors of CART, there is one claim that we are aware of that resulted in
litigation against CART in bankruptcy court and there may be other claims by
creditors against CART which could result in additional litigation. The Company
is currently unable to determine to what extent or whether these asserted and
unasserted claims will be allowed or if they will ultimately result in
litigation involving the Company. The amount of any distributions to the Company
as a creditor of CART will be effected by any such litigation whether the result
is the cost of litigation, settlement, or ultimate adverse decision. The result
of such disputes will affect the amount ultimately distributed to the Company
and thus available for distributions to stockholders.

        On August 5, 2004, the Company was served with a complaint to avoid and
recover preferential transfers filed on behalf of WorldCom, Inc. and MCI, Inc.,
in the United States Bankruptcy Court for the Southern District of New York. The
action alleges that the Company received $1.5 million in July of 2002, which was
a payment within 90 days of the date that WorldCom, Inc. and its subsidiaries
commenced their bankruptcy by filing under Chapter 11 of the Bankruptcy Code.
The parties are discussing a settlement.

        EMPLOYMENT AGREEMENTS. The Company has modified the employment
agreements with its Chief Executive Officer and Chief Financial Officer. The
modified employment agreements expire on November 30, 2005.



                                       10
<PAGE>

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

        Upon completion of the sale of substantially all of our operating assets
to Open Wheel in February 2004, most of our employees resigned and accepted
employment with Open Wheel and we ceased operations. We cannot list here all the
risks and uncertainties that could cause our financial results to differ
materially from our present expectations or projections regarding the estimated
distribution to stockholders, but we can identify many of them. These are set
forth in "Factors That May Affect Future Results."

        The following information is presented primarily for historical purposes
and should be read noting that the Company is no longer involved in an active
business.

CRITICAL ACCOUNTING POLICIES

Use of Estimates

        The following discussion and analysis of our financial condition and
results of operations are based upon our consolidated financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States of America. The preparation of these financial
statements requires us 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 periods.

        Significant accounting estimates include the allowance for doubtful
accounts for trade accounts receivable, income taxes and related valuation
allowances, litigation and certain accrued liabilities.

        We believe that the estimates, assumptions and judgments involved in the
accounting policies described below have a material impact on our financial
statements. These areas are subject to the risks and uncertainties we describe
in this report. Actual results, therefore, could differ from those estimated.

Litigation

        We are involved in litigation as a result of CART, Inc.'s bankruptcy
filing. Our litigation proceedings are included in our most recent Form 10-K,
Item 3: Legal Proceedings and updated, as needed, in Part II-Other Information,
Item 1: Legal Proceedings in this Form 10-Q. When a complaint is filed by or
against us that represents a material claim, we disclose the proceeding in our
financial statements. When a claim against us is probable and reasonably
estimable, we record the expense. When we are the party filing the claim, we do
not record gain contingency until any recovery from the claim are assured.

RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 2005

        We plan to liquidate our remaining assets, pay off our remaining
liabilities and complete the process of liquidation and winding up the Company's
affairs as soon as practicable.

        In 2005, the Company does not expect to receive any revenue as it has
ceased operation and is in the process of winding up its affairs.

        Expenses will be incurred to complete the wind up of the Company. Wind
up expenses will be incurred for salaries and benefits, office, legal,
accounting and public company expenses.



                                       11
<PAGE>

        Total expenses were $546,000 for the three months ended June 30, 2005
which were partially offset by a recovery of $450,000 from the CART Liquidation
Trust. Expenses consisted of legal and consulting fees of $277,000, salaries,
employee and related expenses of $197,000, insurance of $62,000 and other office
and miscellaneous expenses and credits.

        Interest income from cash investments for three months ended June 30,
2005 was $30,000.

        Net loss for the three months ended June 30, 2005 was $65,000.

RESULTS OF OPERATIONS SIX MONTHS ENDED JUNE 30, 2005

        Total expenses were $933,000 for the six months ended June 30, 2005
which were partially offset by a recovery of $450,000 from the CART Liquidation
Trust. Expenses consisted of legal and consulting fees of $387,000, salaries,
employee and related expenses of $391,000, insurance of $133,000 and other
office and miscellaneous expenses and credits.

        Interest income from cash investments for six months ended June 30, 2005
was $56,000.

        Income tax expense for the six months ended June 30, 2005 was $25,000.

        Net loss for the six months ended June 30, 2005 was $450,000.

RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 2004

        In 2004, the only revenues the Company received were from sanctioning
revenues paid to us by Open Wheel for sanctioning their races for the 2004
season, miscellaneous revenue and interest income from our remaining cash and
short-term investments. Sanctioning fees are $12,500 per domestic race and
there were eight domestic events in 2004.

        Expenses were incurred to complete the wind up of the Company. Wind up
expenses were incurred for salaries and benefits, severance and related
expenses, office, legal, accounting and public company expenses. CART, Inc.,
will also incur expenses related to setting up a liquidation trust and expenses
of a liquidation trustee as well as other expenses related to its Chapter 11
Bankruptcy filing.

        Total revenues were $47,000 for the three months ended June 30, 2004,
related to sanction fees of $38,000 and other miscellaneous revenues.

        Total expenses were $596,000 for the three months ended June 30, 2004.
Expenses consisted of legal and consulting fees of $320,000, salaries, employee
and related expenses of $302,000 and other office and miscellaneous expenses and
credits.

        Net loss before income taxes was $516,000. An income tax benefit of
$877,000 was recognized during the quarter, representing management's estimate
for tax refunds expected to be received by the Company through the utilization
of net operating loss carryback claims previously deemed not realizable. Net
income for the quarter ended June 30, 2004 was $361,000.

RESULTS OF OPERATIONS SIX MONTHS ENDED JUNE 30, 2004

        Total revenues were $104,000 for the six months ended June 30, 2004,
related to sanction fees of $38,000, equipment rental of $12,000 and other
miscellaneous revenues of $54,000.



                                       12
<PAGE>

        Total expenses were $2.8 million for the six months ended June 30, 2004.
Administrative expenses consisted of normal operating expenses through, February
13, 2004, the date the "Asset Purchase Agreement" was finalized. Expenses
consisted of legal and consulting fees of $1.7 million, salaries, employee and
severance related expenses of $893,000, offices expenses of $135,000 and other
miscellaneous expenses.

        Net loss before income taxes was $2.6 million. An income tax benefit of
$877,000 was recognized during the six months ended June 30, 2004 for reasons
stated above. Net operating loss for the six months ended June 30, 2004 was $1.7
million.

LIQUIDITY AND CAPITAL RESOURCES

                We intend to liquidate our remaining assets, pay off our
remaining liabilities and complete the process of liquidation and winding up the
Company's affairs. Our Board of Directors has not adopted a plan of liquidation
and dissolution at this time but intend to adopt a plan option when all material
claims against the Company are resolved. In the event that our Board of
Directors adopts a plan of liquidation and dissolution, we would expect to incur
liquidation expenses, in addition to payments of ongoing operating expenses and
settlement of existing or potential obligations. Liquidation expenses may
include, among others, employee salaries and related costs, and legal and
accounting fees, as well as payments to a liquidation trustee. While we cannot
currently make a precise estimate of the expenses, a significant portion of our
current cash may be required to pay the above expenditures.

        At June 30, 2005, we had $5.1 million in working capital, and our
primary source of liquidity was $5.1 million in cash and cash equivalents. Our
cash balance on June 30, 2005 was $5.1 million, a net decrease of $331,0000 from
December 31, 2004. This decrease was the result of net cash used to pay net
operating expenses of $483,000.

        In April 2002, we entered into a lease for a corporate
headquarters in Indianapolis, Indiana. The lease commenced on May 1, 2002 and
expires on October 31, 2010. The total amount due through the life of the lease
as of June 30, 2005 is $1.7 million. We have sublet this office space to Open
Wheel, and retain office space for our use, at no cost. However, we remain
liable on the lease.

<Table>
<Caption>
                                                              Payments due by Period
                                                              ----------------------
                                                  Less Than            1-3                4-5             After 5
Contractual Obligations          Total             1 Year             Years              Years             Years
--------------------------------------------------------------------------------------------------------------------
<S>                          <C>                <C>                <C>                <C>                <C>
Operating Leases*            $ 1,647,814        $   384,016        $   926,895        $   411,953        $        --
--------------------------------------------------------------------------------------------------------------------
Employment Agreements            142,307            142,307                 --                 --                 --
--------------------------------------------------------------------------------------------------------------------
Total                        $ 1,790,121        $   526,323        $   926,895        $   411,953        $        --
--------------------------------------------------------------------------------------------------------------------
</TABLE>

* Sublet to Open Wheel for the amounts of lease obligations.

FACTORS THAT MAY AFFECT FUTURE RESULTS

WE CANNOT ASSURE YOU OF THE AMOUNT, IF ANY, OF ANY DISTRIBUTION TO OUR
STOCKHOLDERS UNDER A PLAN OF COMPLETE LIQUIDATION AND DISSOLUTION.

        Liquidation and dissolution may not create value to our stockholders or
result in any remaining capital for distribution to our stockholders. We cannot
assure you of the precise nature and amount of any distribution to our
stockholders pursuant to a plan of distribution. Uncertainties as to the
ultimate amount



                                       13
<PAGE>

of our liabilities make it impracticable to predict the aggregate net value
ultimately distributable to our stockholders. The actual nature and amount of
all distributions will depend in part upon our ability to settle our liabilities
or potential liabilities. We may not be successful in doing so to return a
meaningful amount of cash to our stockholders.

WE MAY NOT BE ABLE TO SETTLE ALL OF OUR OBLIGATIONS TO CREDITORS.

        We have current and future obligations to creditors. These include,
without limitation, long-term contractual obligations. As part of the wind down
process, we will attempt to settle our obligations with our creditors. We may
not, however, succeed in doing so. If we cannot reach an agreement with a
creditor concerning an obligation, that creditors may choose to bring a lawsuit
against us, or continue an existing suit. Any litigation could delay or even
prevent us from completing the plan of dissolution. Moreover, amounts required
to settle our obligations to creditors will reduce the amount of remaining
capital available for distributions to stockholders.

WE WILL CONTINUE TO INCUR CLAIMS, LIABILITIES AND EXPENSES WHICH WILL REDUCE THE
AMOUNT AVAILABLE FOR DISTRIBUTION TO STOCKHOLDERS.

        Claims, liabilities and expenses from operations (such as operating
costs, salaries, directors' and officers' insurance, payroll and local taxes,
legal, accounting and consulting fees and miscellaneous office expenses) will
continue to be incurred as we wind down. These expenses will reduce the amount
of assets available for ultimate distribution to stockholders. If available cash
is not adequate to provide for our obligations, liabilities, expenses and
claims, we may not be able to distribute meaningful cash, or any cash at all, to
our stockholders.

DISTRIBUTION OF ASSETS, IF ANY, TO OUR STOCKHOLDERS COULD BE DELAYED.

        Our Board of Directors has not established a firm timetable for
proposing to our stockholders a plan of liquidation, nor can we assure approval
of such a plan or the amount of any distributions to our stockholders. We are
currently unable to predict the precise timing of any distribution, if any,
pursuant to our wind down. The timing of distribution, if any, will depend on
and could be delayed by, among other things, the timing of claim settlements
with creditors and actual and potential litigation. Additionally, a creditor
could seek an injunction against the making of distributions to our stockholders
on the grounds that the amounts to be distributed were needed to provide for the
payment of our liabilities and expenses. Additionally, we could seek protection
from creditors under the federal bankruptcy code. Any action of this type could
delay or substantially diminish, or eliminate, the amount available for
distribution to our stockholders.

IF WE FAIL TO CREATE AN ADEQUATE CONTINGENCY RESERVE FOR PAYMENT OF OUR EXPENSES
AND LIABILITIES, OUR STOCKHOLDERS COULD BE HELD LIABLE FOR PAYMENT TO OUR
CREDITORS OF EACH SUCH STOCKHOLDER'S PRO RATA SHARE OF AMOUNTS OWED TO THE
CREDITORS IN EXCESS OF THE CONTINGENCY RESERVE, UP TO THE AMOUNT ACTUALLY
DISTRIBUTED TO SUCH STOCKHOLDER.

        If a plan of dissolution is proposed to and approved by our
stockholders, we will file a Certificate of Dissolution with the State of
Delaware dissolving the Company. Pursuant to the Delaware General Corporation
Law, we will continue to exist for three years after the dissolution becomes
effective or for such longer period as the Delaware Court of Chancery shall
direct, for the purpose of prosecuting and defending suits against us and
enabling us gradually to close our business, to dispose of our property, to
discharge our liabilities and to distribute to our stockholders any remaining
assets. Under the Delaware



                                       14
<PAGE>

General Corporation Law, in the event we fail to create an adequate contingency
reserve for payment of our expenses and liabilities during this three-year
period, each stockholder could be held liable for payment to our creditors of
such stockholder's pro rata share of amounts owed to creditors in excess of the
contingency reserve, up to the amount actually distributed to such stockholder.

        However, the liability of any stockholder would be limited to the
amounts previously received by such stockholder from us (and from any
liquidating trust or trusts) in the dissolution. Accordingly, in such event a
stockholder could be required to return all distributions previously made to
such stockholder. In such event, a stockholder could receive nothing from us
under the plan of dissolution. Moreover, in the event a stockholder has paid
taxes on amounts previously received, a repayment of all or a portion of such
amount could result in a stockholder incurring a net tax cost if the
stockholder's repayment of an amount previously distributed does not cause a
commensurate reduction in taxes payable. There can be no assurance that the
contingency reserve established by us will be adequate to cover any expenses and
liabilities.

WE DO NOT EXPECT TO RECOGNIZE ANY MATERIAL REVENUE IN THE FUTURE

        We do not expect to recognize much additional revenue.

WE WILL CONTINUE TO INCUR THE EXPENSES OF COMPLYING WITH PUBLIC COMPANY
REPORTING REQUIREMENTS.

        We have an obligation to continue to comply with the applicable
reporting requirements of the Securities Exchange Act of 1934, as amended,
referred to as the "Exchange Act," even though compliance with such reporting
requirements is economically burdensome.

RELATED PARTY TRANSACTIONS

        Gerald R. Forsythe, is one of the principal members of Open Wheel which
purchased the assets of CART, Inc. pursuant to an Asset Purchase Agreement,
entered into in February 2004. The consideration paid to CART, Inc., for the
purchase of the assets, along with the stock of Promotion Agency, Ltd. And CART
Licensed Products, Inc. was $3.3 million in cash, the assumption by the buyer of
$1.4 million in prize money owed to teams not affiliated with the principals of
Open Wheel, forgiveness of $1.3 million in prize money due teams affiliated with
principals of Open Wheel, including Mr. Forsythe and the assumption of certain
promoter, sponsorship, and other contracts. The agreement was approved by the
order of the bankruptcy court at a hearing on January 28, 2004.

        In 2004, the Company sanctioned the races for Open Wheel. The Company
received $12,500 for each domestic race it sanctions and was reimbursed for
various expenses it incurred in sanctioning the events.

        We have also sub-leased our Indianapolis office and warehouse to Open
Wheel for substantially the same terms as our lease, we remain obligated on the
lease which runs through 2010.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

        With the exception of historical information contained in this Form
10-Q, certain matters discussed are forward-looking statements. These
forward-looking statements involve risks that could cause the actual results and
plans for the future to differ from these forward-looking statements. The
factors listed below, among others, could cause the forward-looking statements
to differ from actual results and plans:



                                       15
<PAGE>

        Additional information concerning factors that could cause actual
results to differ materially from those in the forward-looking statements is
contained in the Company's SEC filings made from time to time, including, but
not limited to, the Form 10-K for the year ended December 31, 2004. Copies of
those filings are available from the Company and at the SEC's website
www.sec.gov. The Company undertakes no obligation to update publicly any
forward-looking statements as a result of new information, future events, or
otherwise.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

        INTEREST RATE RISK. Our investment policy was designed to maximize
safety and liquidity while maximizing yield within those constraints. At June
30, 2005, our cash equivalents consisted of money market funds. Because of the
relatively short-term nature of our investments, our interest rate risk is not
considered significant.

ITEM 4: CONTROLS AND PROCEDURES

        (a) As of June 30, 2005 we carried out an evaluation, under the
        supervision and with the participation of our Chief Executive Officer
        and Chief Financial Officer, of the effectiveness of the design and
        operation of our disclosure controls and procedures pursuant to Exchange
        Act Rule 13a-14. Based upon that evaluation, our Chief Executive Officer
        and Chief Financial Officer concluded that our disclosure controls and
        procedures are effective in timely alerting them to material information
        relating to us (including our consolidated subsidiaries) required to be
        included in our periodic SEC filings.

        (b) Upon completion of the sale of substantially all of our operating
        assets to Open Wheel in February 2004, most of our employees resigned
        and accepted employment with Open Wheel and we ceased operations. We are
        in the process of winding up the affairs of the Company. We currently
        have two employees, the Chief Executive Officer and Chief Financial
        Officer, and we also use temporary accounting help in winding up the
        Company's affairs. Our accounting staff consists of our Chief Financial
        Officer. All significant expenditures are authorized and approved by our
        Chief Executive Officer and considering the current state of the
        Company's affairs believe we have effective internal controls and
        authorizations in place.



                                       16
<PAGE>

                      CHAMPIONSHIP AUTO RACING TEAMS, INC.

                           PART II - OTHER INFORMATION


Item 1.         Legal Proceedings.

        On November 4, 2003, 88 Corp. filed suit against CART, Inc. in the
United States Federal District Court for the Central District of California. 88
Corp., the promoter of the CART Champ Car World Series race at the California
Speedway in Fontana, California, claimed that the race, which was to be held on
November 2, 2003, was canceled due to a "force majeure" and requested a judicial
determination as to whether the organizational and rights fee of $2.5 million,
previously paid by 88 Corp. to CART, minus reasonable expenses incurred by CART,
should be refunded to 88 Corp. As a result of the bankruptcy of CART, this
litigation was suspended. 88 Corp. has filed a proof of claim against CART in
the bankruptcy court proceedings requesting repayment of the $2.5 million,
imposition of a constructive trust, and such other relief as the bankruptcy
court deems appropriate. CART has objected to the claim and has asserted against
88 Corp. a claim for wrongful termination of the sanction agreement as it
relates to the 2003 and 2004 races in the amount of $5.2 million. At the time
the CART stock was canceled and its assets and liabilities were placed in the
CLT, the Company was unable to make a determination as to the likelihood of an
unfavorable outcome or estimate the amount or range of the recovery or loss. On
April 27, 2005, CLT entered into a settlement agreement with 88 Corp. in which
CLT agreed to pay 88 Corp. $1.7 million. The settlement was subject to approval
by the bankruptcy court. On May 10, 2005, the bankruptcy court approved the
settlement.

        In connection with CART's bankruptcy filing, based upon filings by
creditors of CART, there is one claim that we are aware of that resulted in
litigation against CART in bankruptcy court and there may be other claims by
creditors against CART which could result in additional litigation. The Company
is currently unable to determine to what extent or whether these asserted and
unasserted claims will be allowed or if they will ultimately result in
litigation involving the Company. The amount of any distributions to the Company
as a creditor of CART will be effected by any such litigation whether the result
is the cost of litigation, settlement, or ultimate adverse decision. The result
of such disputes will affect the amount ultimately distributed to the Company
and thus available for distributions to stockholders.

        On August 5, 2004, the Company was served with a complaint to avoid and
recover preferential transfers filed on behalf of WorldCom, Inc. and MCI, Inc.,
in the United States Bankruptcy Court for the Southern District of New York. The
action alleges that the Company received $1.5 million in July of 2002, which was
a payment within 90 days of the date that WorldCom, Inc. and its subsidiaries
commenced their bankruptcy by filing under Chapter 11 of the Bankruptcy Code.
The parties are discussing a settlement.



                                       17
<PAGE>

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

                (a) Exhibits.

                    31.1  Certification Pursuant to Section 302 of the
                          Sarbanes-Oxley Act of 2002 by Christopher R. Pook,
                          Chief Executive Officer dated as of August 15, 2005.

                    31.2  Certification Pursuant to Section 302 of the
                          Sarbanes-Oxley Act of 2002 by Thomas L. Carter, Chief
                          Financial Officer dated as of August 15, 2005.

                    32.1  Certification Pursuant to 18 U.S.C. Section 1350, as
                          Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                          Act of 2002 by Christopher R. Pook, Chief Executive
                          Officer dated as of August 15, 2005.

                    32.2  Certification Pursuant to 18 U.S.C. Section 1350, as
                          Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                          Act of 2002 by Thomas L. Carter, Chief Financial
                          Officer dated as of August 15, 2005.

                    99.1  Third Amendment to Employment Agreement with
                          Christopher R. Pook.

                    99.2  Amendment of Employment Agreement with Thomas L.
                          Carter.

                (b) Reports on Form 8-K.

                    1)    On May 26, 2005, Championship Auto Racing Teams, Inc.
                          announced that the bankruptcy of its subsidiary CART,
                          Inc. was complete and that distributions had been made
                          to its creditors, including the Company.



                                       18
<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.

                                        CHAMPIONSHIP AUTO RACING TEAMS, INC.


Date: August 12, 2005                   By: /s/ Thomas L. Carter
     --------------------                  -------------------------------------
                                            Thomas L. Carter
                                            Chief Financial Officer









                                       19