SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark one)

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
         SECURITIES EXCHANGE ACT OF 1934
         For the quarterly period ended June 30, 1998

                                       OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
         SECURITIES ACT OF 1934
         For the transition period from _________    to   _____________________


                  Commission File Number:            1-5673

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

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

                                One Regency Drive
 .........................Bloomfield, Connecticut 06002.........................
                    (Address of principal executive offices)

 ..................................(860) 726-1208................................
                (Issuer's telephone number, including area code)

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the  Securities  Exchange  Act of 1934  during the  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 / /

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date (August 12, 1998): 5,288,644 shares

Transitional Small Business Disclosure Format (check one):   Yes / /    No /X/

744634.6

<PAGE>
                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

                             RANGER INDUSTRIES, INC.

                       (formerly Coleco Industries, Inc.)

                            CONDENSED BALANCE SHEETS

                    September 30, 1998 and December 31, 1997
                                     -------



                                     ASSETS

<TABLE>
<CAPTION>

                                                                  September 30,      December 31,
                                                                      1998              1997
                                                                      ----              ----
                                                                  (Unaudited)

<S>                                                               <C>                <C>
Current assets:
    Cash and equivalents                                           $   781,792       $ 784,800
    Prepaid expenses                                                    35,418            -
    Income tax receivable                                                4,642           3,446
                                                                   -----------       ---------
               Total current assets                                    821,852         788,246

Other assets:
    Prepaid compensation expense                                        91,003            -
                                                                   -----------       ---------

               Total assets                                        $   912,855       $ 788,246
                                                                   ===========       =========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Accounts payable and other liabilities                         $    26,248      $   19,918
    Deferred Income taxes                                                2,708
    Accrued interest payable                                              -             16,337
    Note payable to Pure Group, Inc.                                      -            196,477
    Other amounts owed to Pure Group, Inc.                                -            265,303
                                                                   -----------       ---------

               Total current liabilities                                20,368         498,035

Non-current liabilities:
    Deferred income taxes                                                8,391            -
                                                                   -----------       ---------

               Total liabilities                                        20,368         498,035
                                                                   -----------       ---------

Stockholders' equity:
    Common stock                                                        52,886          40,000
    Capital in excess of par value                                   1,661,330         985,000
    Retained deficit                                                  (830,120)       (734,789)
                                                                   -----------       ---------
               Total stockholders' equity                              884,096         290,211
                                                                   -----------       ---------

               Total liabilities and stockholders' equity          $   912,855       $ 788,246
                                                                   ===========       =========
</TABLE>


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



744634.6
                                        2

<PAGE>



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

            CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

                  for the quarters ended September 30, 1998 and 1997

                                   (Unaudited)
                                     -------





                                                        1998           1997
                                                        ----           ----

Net sales                                             $    -          $   -
                                                      ----------     ----------

Operating costs and expenses:
    Administrative expenses                               59,983         37,513
    Legal and settlement expenses                          2,000          7,020
    Proxy contest and annual meetings expenses              -           249,815

Other income and (expenses):
    Bad debt recoveries income                               711        802,160
    Interest expense                                        -            (8,082)
    Interest income                                        8,959           -
                                                      ----------     ----------
           Income (loss) before income taxes             (52,313)       499,730
                                                      ----------     ----------

Provision (benefit) for income taxes                       2,100          8,000
    Current                                               (4,600)          -
    Deferred                                              11,099           -
                                                      ----------     ----------

           Net comprehensive income loss                 (58,812)       499,730
                                                      ----------     ----------

Basic income (loss) per share                         $     (.01)    $     (.03)
                                                      ==========     ==========

Weighted average common stock outstanding              4,893,040      4,000,000
                                                      ==========      =========




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



744634.6
                                        3

<PAGE>



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

            CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

              for the nine months ended September 30, 1998 and 1997

                                   (Unaudited)
                                     -------




                                                           1998         1997
                                                           ----         ----

Net sales                                            $      -        $    -
                                                     -----------     ----------

Operating costs and expenses:
    Administrative expenses                              84,300          98,738
    Legal and settlement expenses                        24,384         104,020
    Proxy contest and annual meeting expenses              -            249,815

Other income and (expenses):
    Bad debt recoveries income                            2,603         802,160
    Interest expense                                     (5,498)         (8,082)
    Interest income                                      27,347               7
                                                     ----------      ----------
           Income loss before income taxes              (84,232)        341,512

                                                     ----------      ----------

Provision for income taxes:
    Current                                                -              8,000
    Deferred                                             11,099            -
                                                     ----------      ----------

           Net comprehensive income (loss)              (95,331)        333,512
                                                     ----------      ----------

Basic income (loss) per share                        $     (.02)     $     (.08)
                                                     ===========     ==========

Weighted average common stock outstanding             4,696,601       4,000,000
                                                     ==========      ==========






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



744634.6
                                        4

<PAGE>



<TABLE>
<CAPTION>
                             RANGER INDUSTRIES, INC.

                       (formerly Coleco Industries, Inc.)

                       CONDENSED STATEMENTS OF CASH FLOWS

              for the nine months ended September 30, 1998 and 1997

                                   (Unaudited)
                                     -------



                                                                           1997              1996
                                                                           ----              ----

<S>                                                                      <C>              <C>
Cash flows from operating activities:
    Net comprehensive income (loss) to                                   $(95,331)        $ 333,512
                                                                         --------         ---------
    Adjustments to reconcile net comprehensive loss to 
      net cash used in operating activities:
         Interest expense settled in shares of Ranger stock                 5,498              -
         Compensation expense settled in shares of Ranger stock            36,997              -
         Changes in assets and liabilities:

           Bad debt recoveries receivables                                 (1,196)             -
           Prepaid expenses                                                (3,418)           (7,706)
           Accounts payable, accrued liabilities and interest payable      (2,258)          (15,897)
           Increase in deferred income taxes                               11,099
                                                                         --------         ---------
              Total adjustments                                             4,692           124,353
                                                                         --------         ---------

              Net cash used in operating activities                       (31,827)          (41,865)
                                                                         --------         ---------

Cash flows from financing activities:
    Distribution from reorganization trust                                 45,601              -
    Proceeds from note payable to Pure Group, Inc.                           -              196,477
    Other proceeds from Pure Group, Inc.                                     -              263,338
                                                                         --------         ---------
         Net cash provided by financing activities                         45,601           459,815

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period                          784,800            43,009
                                                                         --------         ---------

Cash and cash equivalents at end of period                               $781,792         $  13,504
                                                                         ========         =========


Noncash transactions:
    Common stock issued in exchange for the cancellation
      of amount owed to PGI                                              $483,616         $  -
                                                                         ========         =========

Common stock issued in exchange for employment services                  $160,000         $  -
                                                                         ========         =========

</TABLE>


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



744634.6
                                        5

<PAGE>



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

                     NOTES TO CONDENSED 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.  Also
         see Note 8.

         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





774634.6
                                        6

<PAGE>


                             RANGER INDUSTRIES, INC.

                       (formerly Coleco Industries, Inc.)



               NOTES TO CONDENSED FINANCIAL STATEMENTS, Continued
                                     -------






         then  outstanding  obligations.  The note  required  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 were subject to
         the same terms outlined in the demand  promissory  note. Also, see Note
         6.



3.       Management's Representation:

         The  accompanying  condensed  financial  statements  should  be read in
         conjunction  with the Notes to Financial  Statements  and  Management's
         Discussion   and  Analysis  of  Financial   Condition  and  results  of
         operations  included in the Company's  1997 Annual Report filed on Form
         10-KSB and in this Form 10-QSB report.

         In the opinion of  management,  all  adjustments  necessary  for a fair
         presentation of the results for the interim periods have been made.



4.       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.,

774634.6
                                        7

<PAGE>


                             RANGER INDUSTRIES, INC.

                       (formerly Coleco Industries, Inc.)



               NOTES TO CONDENSED FINANCIAL STATEMENTS, Continued
                                     -------






         although  such  assets  and  liabilities  are not  presented  in  these
         financial statements (also see Note 5).

         Tax  expense or  benefit is  attributable  to state  taxes and  Federal
         alternative minimum tax.



4.       Income Taxes, Continued:

         At September 30, 1998 and December 31, 1997, it was estimated  that the
         Company had adjusted tax net operating  loss  carryforwards  and future
         deductions of  approximately  $182.1 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
         September  30, 1998 and December  31, 1997 the Company had  Alternative
         Minimum Tax (AMT) loss  carryforwards of  approximately  $153.8 million
         which will also begin to expire in the year 2002.  The Company also had
         approximately $7.7 million of tax credit carryforwards at September 30,
         1998 and December 31, 1997 respectively.  At the current tax rates, the
         taxable income equivalent of the credit  carryforwards is approximately
         $22.6 million.

         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 5).

         At September  30, 1998,  the Company had  deferred tax  liabilities  of
         $11,099,  a compensation  expense temporary  difference.  There were no
         deferred  tax  liabilities  at December  31,  1997.  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 the uncertainty of the Company's ability
         to generate taxable income to utilize the carryforwards.








774634.6
                                        8

<PAGE>


                             RANGER INDUSTRIES, INC.

                       (formerly Coleco Industries, Inc.)



               NOTES TO CONDENSED FINANCIAL STATEMENTS, Continued
                                     -------






5.       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 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 $182.1 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  condensed  financial  statements  do  not  include  any
         adjustments   that  might   result   from  the   resolution   of  these
         uncertainties.

6.       PGI Indebtedness:

         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 $.6132/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, the date of the agreement.

774634.6
                                        9

<PAGE>


                             RANGER INDUSTRIES, INC.

                       (formerly Coleco Industries, Inc.)



               NOTES TO CONDENSED FINANCIAL STATEMENTS, Continued
                                     -------








7.       Stock Compensation:

         On August 4,  1998,  the  Company  entered  into a  five-year  Employee
         Agreement (the "Agreement") with Mr. Morton E. Handel, where Mr. Handel
         will serve as the Company's Chief Executive  Officer and President.  As
         base compensation,  in lieu of cash, Mr. Handel received 500,000 shares
         of the Company's  stock,  one-fifth of which is immediately  vested and
         non-forfeitable  as of the date of the Agreement.  Mr. Handel will vest
         an additional 20 percent each year over the next four  anniversaries of
         the Agreement.

         The estimated  market value of the stock award was $160,000 or $.32 per
         share. The Company will incur compensation expense based on the vesting
         terms  included in the Agreement.  For the quarter ended  September 30,
         1998, the Company recognized compensation expense of $40,031, including
         related taxes, in connection  with this stock award,  which is included
         in administrative expenses in the condensed financial statements.



8.       Distribution from Ranger Industries, Inc.'s Reorganization Trust:

         As described in Note 1, the Reorganization Trust made what was expected
         to be its final  distribution  to creditors on May 29, 1996.  In August
         1998,  however,  the Company  received an  additional  distribution  of
         $45,601 from the former Reorganization Trust's trustee. This amount has
         been reflected as an adjustment to the original  capitalization  of the
         Company and, accordingly, is included in capital in excess of par value
         at September 30, 1998.



9.       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 $4,800 for these services for each of the quarters ended March
         31, and June 30, 1997. In connection with






774634.6
                                       10

<PAGE>


                             RANGER INDUSTRIES, INC.

                       (formerly Coleco Industries, Inc.)



               NOTES TO CONDENSED FINANCIAL STATEMENTS, Continued
                                     -------






         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.

         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  condensed  financial  statements.  All
         amounts owed to Mr. Rubin in connection  with this  agreement were paid
         during the quarter ended September 30, 1997.

         Also, see Notes 2, 6 and 7.







774634.6
                                       11

<PAGE>



                     PART I - FINANCIAL INFORMATION (cont'd)



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



         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 material source of revenue was
    interest  on its  cash,  except  that  in the  last  quarter  of  1996,  the
    Registrant  received a distribution  of  approximately  $75,000 from a trust
    (the  "Reorganization  Trust")  which  was  established  in  the  bankruptcy
    proceeding  to liquidate  the  Registrant's  assets and  distribute  the net
    proceeds to the claimants in the bankruptcy  proceeding.  In the period from
    1990 through 1996, the Registrant's expenses always exceeded earnings. As of
    December 31, 1996, the Registrant  had a retained  deficit of  approximately
    $1,046,000,  and, as of that date, had no business and no material financial
    resources.  Current  management  gained control of the Registrant in a proxy
    contest that ended in the third  quarter of 1997.  In the fourth  quarter of
    1997, the Registrant received approximately $800,000 from a bankruptcy claim
    filed  by the  Registrant  in  1983.  In the  third  quarter  of  1998,  the
    Registrant received a distribution of approximately $46,000 from the trustee
    of the Reorganization Trust.



         As a result of the receipt of $800,000 in the last  quarter of 1997 and
    $46,000 in the third  quarter of 1998,  the  Registrant  now has  sufficient
    liquidity to meet its current operating expenses for the foreseeable future.
    The Registrant's cash on hand was approximately $782,000 as of September 30,
    1998, and the  Registrant's  projected cash operating costs and expenses for
    the fiscal  year ending  December  31,  1998,  are  approximately  $100,000.
    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 (see the following
    paragraph),   and  (ii)  the  possible   utility  of  net   operating   loss
    carryforwards  ("NOLs") of  approximately  $182 million as of September  30,
    1998.  See Note 4,  Income  Taxes,  in the  Condensed  Financial  Statements
    (unaudited) included in Part I of this Report.






774634.6
                                       12

<PAGE>



         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 September 30, 1998.  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.  The Registrant does not expect to consider
    making such an application until claims against the Trust are settled.



         NOLs. The NOLs have sheltered the  Registrant's  modest interest income
    and the income of the  Product  Liability  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 NOLs is uncertain.



         Employment  Agreement for Chief Executive  Officer.  The Company's only
    executive officer,  Mr. Morton E. Handel,  served without  compensation from
    the third quarter of 1997,  when he took office,  until the third quarter of
    1998.  Because of the Company's  lack of income or cash flow, and because of
    the need to conserve  the  Company's  limited  cash  resources,  Mr.  Handel
    offered to continue his service as the Company's  executive  officer through
    and beyond the third  quarter of 1998  without  receiving  any regular  cash
    salary. As more fully set forth in the Registrant's quarterly report on Form
    10-QSB for the second quarter of 1998, the Company  entered into a five-year
    employment agreement with Mr. Handel,  effective August 4, 1998, under which
    he has  received  500,000  shares of the  Company's  Common  Stock (of which
    400,000  shares are subject to  forfeiture  in certain  circumstances)  (the
    "Employment  Shares")  and  certain  cash  payments  if and when the Company
    receives cash  distributions from the Product Liability Trust. The estimated
    fair market value of the Employment  Shares as of August 4, 1998, will be an
    expense to the Registrant over the four-year  vesting term of the employment
    agreement.



         Changes in Financial Condition. The Registrant's financial condition is
    set forth in the Balance  Sheets as of  September  30, 1998 and December 31,
    1997.  The changes in  financial  condition  between the two dates  resulted
    mainly from the exchange of debt owed to a shareholder which is an affiliate
    of a  director  of the  Registrant  for the  Registrant's  issuance  to that
    shareholder of 788,644 shares of the Registrant's Common Stock.




774634.6
                                       13

<PAGE>



         Net interest  income  (expense) in the quarter ended September 30, 1998
    ("Third  Quarter '98") was  approximately  $9,000,  compared to none for the
    quarter  ended  September  30, 1997 ("Third  Quarter  '97"),  because of the
    interest  earned on the  $800,000  bankruptcy  distribution  received in the
    fourth  quarter of 1997 and on the $46,000  distribution  received in August
    1998.   Interest  expense  for  the  balance  of  1998  is  expected  to  be
    approximately  $6,000. Net comprehensive income (loss) for the Third Quarter
    '98 was approximately  ($59,000),  compared to approximately $500,000 in the
    Third Quarter '97, principally because of the entry, in the third quarter of
    1997, of a receivable  corresponding to the approximately  $800,000 received
    by the  Registrant  in the fourth  quarter of 1997 from a  bankruptcy  claim
    filed by the Registrant in 1983.



         Net interest  income  (expense) in the nine months ended  September 30,
    1998 ("First Three Quarters  '98") was  approximately  $22,000,  compared to
    ($8,000) for the nine months ended September 30, 1997 ("First Three Quarters
    '97"),   because  of  the  interest   earned  on  the  $800,000   bankruptcy
    distribution  received  in the  fourth  quarter  of 1997 and on the  $46,000
    distribution  received in August  1998,  and because of the  elimination  of
    interest expense by the exchange in March 1998 of debt owed to a shareholder
    for shares of common stock.  Net  comprehensive  income (loss) for the First
    Three Quarters '98 was  approximately  ($95,000),  compared to approximately
    $334,000 in the First Three Quarters '97,  principally because of the entry,
    in  the  third  quarter  of  1997,  of a  receivable  corresponding  to  the
    approximately  $800,000  received by the Registrant in the fourth quarter of
    1997 from a bankruptcy claim filed by the Registrant in 1983.



         Year 2000 Issues.  The  Registrant  does not use a computer to maintain
    its financial  records at this time. The Registrant  therefore (i) considers
    itself ready to deal with the  transition to the year 2000;  (ii) expects to
    bear no significant  costs associated with addressing the Year 2000 problem;
    and (iii)  believes  that its Year 2000  issues  present it with no material
    risks. The Registrant cannot be certain that BankBoston, the bank where most
    of the Registrant's cash is kept in the form of accounts,  will be free from
    Year  2000  difficulties.  The  Registrant  believes,  however,  that  those
    accounts  are safe  from any  material  risk  associated  with the Year 2000
    problem.  The Registrant has not considered it necessary to make contingency
    plans for dealing with the Year 2000 problem and it has not done so.








774634.6
                                       14

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                           PART II - OTHER INFORMATION



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



    (a)   Exhibit  27.       Financial Data Schedule for Third Quarter of 1998.



    (b)   Reports on Form 8-K:  None.




774634.6
                                       15

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                                   SIGNATURES



               In  accordance  with the  requirements  of the Exchange  Act, the
     Registrant  caused this report to signed on its behalf by the  undersigned,
     thereunto duly authorized.



                                     Ranger Industries, Inc., the Registrant





     Date:  November 13, 1998       By:   /s/ Morton E. Handel
                                          --------------------------------------
                                          Morton E. Handel
                                          President, Chief Executive Officer and
                                                 Acting Chief Financial Officer






774634.6

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