<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549


                                   FORM 10-Q


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


              For the first quarterly period ended March 31, 2001


                               GIANT GROUP, LTD.

      9440 Santa Monica Blvd. Suite 407, Beverly Hills, California 90210

                 Registrant's telephone number: (310) 273-5678

                        Commission File Number: 1-4323

               I.R.S. Employer Identification Number: 23-0622690

                       State of Incorporation: Delaware


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.


  On May 9, 2001 the latest practicable date, there were 3,174,757 shares of
                           Common Stock outstanding.
<PAGE>

                               GIANT GROUP, LTD.

                                     INDEX

<TABLE>
<CAPTION>
                                                                             Page No.
                                                                             --------
<S>                                                                          <C>
PART I.   FINANCIAL INFORMATION
-------------------------------

Item 1.  Financial Statements

             Consolidated Statements of Operations -
             Three-Month Periods Ended March 31, 2001 and 2000                   3

             Consolidated Balance Sheets -
             March 31, 2001 and December 31, 2000                                4

             Consolidated Statements of Cash Flows -
             Three-Month Periods Ended March 31, 2001 and 2000                   5

             Notes to Consolidated Financial Statements                          6-7

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                                     8


PART II.  OTHER INFORMATION
---------------------------

Item 1.  Legal Proceedings                                                       9

Item 6.  Exhibits and Reports on Form 8-K                                        9

             (a) Exhibits

             (b) Reports on Form 8-K

Signature                                                                        9
</TABLE>

                                       2
<PAGE>

ITEM 1.  FINANCIAL STATEMENTS

                               GIANT GROUP, LTD.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
              for the three-months ended March 31, 2000 and 2001
                                  (Unaudited)
               (Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                           Three-months ended
                                                                March 31,
                                                           2001           2000
                                                        ----------     ----------
 <S>                                                    <C>            <C>
 Costs and expenses:
     General and administrative                         $      405     $      584
     Depreciation                                                9              6
                                                        ----------     ----------
                                                               414            590
                                                        ----------     ----------

 Other income:
     Investment and other income                                16             10
     Gain on sale of marketable securities                       -             17
                                                        ----------     ----------
                                                                16             27
                                                        ----------     ----------

 Loss from continuing operations                              (398)          (563)

 Income from discontinued operations (Note 2)                    -            149

                                                        ----------     ----------
 Net loss                                               $     (398)    $     (414)
                                                        ==========     ==========

 Basic and diluted loss per common share:
            Loss from continuing operations             $    (0.13)    $    (0.14)
            Income from discontinued operations                  -           0.04
                                                        ----------     ----------
 Net loss                                               $    (0.13)    $    (0.10)
                                                        ==========     ==========

 Weighted average shares - basic and diluted             3,155,000      3,990,000
                                                        ==========     ==========
</TABLE>

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

                                       3
<PAGE>

                               GIANT GROUP, LTD.
                          CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                                            March 31,         December 31,
                                                                                               2001               2000
                                                                                           -----------        ------------
                                                                                           (Unaudited)          (Audited)
<S>                                                                                        <C>                <C>
ASSETS
Current assets:
   Cash and cash equivalents                                                                 $    956           $  1,428
   Marketable securities                                                                        5,554              3,840
   Income tax receivable                                                                          171                171
   Prepaid expenses and other assets                                                              250                289
                                                                                             --------           --------
        Total current assets                                                                    6,931              5,728
Property and equipment, net                                                                       115                124
Other assets                                                                                       10                 10
                                                                                             --------           --------
       Total assets                                                                          $  7,056           $  5,862
                                                                                             ========           ========

LIABILITIES
Current liabilities:
   Accounts payable                                                                                88                162
   Accrued expenses                                                                               473                448
   Deferred income taxes                                                                          593                  -
   Income taxes payable                                                                            12                 15
                                                                                             --------           --------
       Total current liabilities                                                                1,166                625
Deferred income taxes                                                                               7                  7
                                                                                             --------           --------
       Total liabilities                                                                        1,173                632
                                                                                             --------           --------

COMMITMENTS AND CONTINGENCIES (Note 4)

STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; authorized 2,000,000 shares, none issued                           -                  -
Class A common stock, $.01 par value; authorized 5,000,000 shares, none issued                      -                  -
Common stock, $.01 par value; authorized 12,500,000 shares, 7,266,000 shares issued                73                 73
Capital in excess of par value                                                                 35,490             35,490
Accumulated other comprehensive income (expense) (Note 3)                                         891               (160)
Accumulated deficit                                                                            (1,717)            (1,319)
                                                                                             --------           --------
                                                                                               34,737             34,084
Less 4,111,000 in 2001 and  2000 shares of Common stock in treasury, at cost                  (28,854)           (28,854)
                                                                                             --------           --------
       Total stockholders' equity                                                               5,883              5,230
                                                                                             --------           --------
       Total liabilities and stockholders' equity                                            $  7,056           $  5,862
                                                                                             ========           ========
</TABLE>

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

                                       4
<PAGE>

                               GIANT GROUP, LTD.
                     CONSOLIDATED STATEMENTS OF CASH FLOW
              for the three-months ended March 31, 2000 and 2001
                                  (Unaudited)
               (Dollars  in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                                        Three-months ended
                                                                                             March 31,
                                                                                         2001        2000
                                                                                        ------      ------
<S>                                                                                     <C>         <C>
 Operating Activities:
    Net loss                                                                            $ (398)     $ (414)
    Adjustments to reconcile net loss to net cash used
        by operations:
          Income from discontinued operations                                                -        (149)
          Depreciation                                                                       9           6
          Accretion of discounts on marketable securities                                    -          (9)
          Gain on the sale of marketable securities                                          -         (17)
          Reversal of executive deferred compensation                                        -         482
    Changes in assets and liabilities:
      Decrease in prepaid expenses and other current assets                                  5         270
      Decrease in accounts payable and accrued expenses                                    (49)       (692)
      Decrease in income tax payable                                                        (3)          -
                                                                                        ------      ------
               Net cash used by continuing operations                                     (436)       (523)
               Net cash provided by discontinued operations                                  -          51
                                                                                        ------      ------
                   Net cash used by operations                                            (436)       (472)
                                                                                        ------      ------

Investing Activities:
  Sales of marketable securities                                                             -       1,962
  Purchases of marketable securities                                                       (36)        (96)
  Purchases of property and equipment                                                        -         (72)
                                                                                        ------      ------
       Net cash (used) provided by continuing investing activities                         (36)      1,794
  Purchases of property and equipment (discontinued operations)                              -        (169)
                                                                                        ------      ------
               Net cash (used) provided by investing activities                            (36)      1,625
                                                                                        ------      ------

Financing Activities:
  Payment of note-receivable - related party (discontinued operations)                       -        (149)
  Payment of capital lease obligations (discontinued operations)                             -         (16)
                                                                                        ------      ------
               Net cash used by financing activities                                         -        (165)
                                                                                        ------      ------

(Decrease) increase in cash and cash equivalents                                          (472)        988

Cash and cash equivalents:
   Beginning of period                                                                   1,428       1,248
                                                                                        ------      ------
   End of period                                                                        $  956      $2,236
                                                                                        ======      ======

Supplemental disclosure for continuing operations of cash paid for:
   Income taxes                                                                         $    3      $    -
   Interest                                                                                  -           -

Supplemental disclosure for discontinued operations of cash paid for:
   Income taxes                                                                         $    -      $    1
   Interest                                                                                  -         750
</TABLE>

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

                                       5
<PAGE>

                               GIANT GROUP, LTD.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)
               (Dollars in thousands, except per share amounts)

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
--------------------------------------------------------------------------------

     The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain information included in this
document (as well as information included in oral statements or other written
statements made or to be made by the Company) contains statements that are
forward-looking, such as statements relating to plans for future activities.
Such forward-looking information involves important risks and uncertainties that
could significantly affect anticipated results in the future and, accordingly,
such results may differ from those expressed in any forward-looking statements
made by or on behalf of the Company. These risks and uncertainties include those
relating to the availability of adequate working capital, the development and
implementation of the Company's business plan and changes in federal or state
tax laws and of the administration of such laws.

1.   Basis of Presentation
     ---------------------

     The accompanying unaudited consolidated financial statements have been
prepared in accordance with Form 10-Q instructions and in the opinion of
management contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of March 31,
2001 and the results of operations and cash flows for the three-month periods
ended March 31, 2001 and 2000.  These results have been determined on the basis
of generally accepted accounting principles and practices applied consistently
with those used in the preparation of the Company's 2000 Annual Report on Form
10-K.  Certain 2000 amounts have been reclassified to conform to the 2001
presentation.  Operating results for the three-month period ended March 31, 2001
are not necessarily indicative of the results that may be expected for the full
year.  It is suggested that the accompanying unaudited consolidated financial
statements be read in conjunction with the financial statements and notes in the
Company's 2000 Annual Report on Form 10-K.

2.   Discontinued Women and Children's Apparel Operations
     ----------------------------------------------------

     On September 25, 2000, the Company's Board of Directors approved a plan for
the disposition of Periscope's apparel operations. On October 31, 2000,
Periscope executed and delivered a letter delivering peaceful possession of its
assets, including accounting books and records to Century Business Credit
Corporation ("Century"). Pursuant to the letter, all receivables, inventory,
fixed assets and other assets of Periscope were transferred to Century. At the
time of the transfer, Periscope was in default under its Factoring Agreement. On
November 30, 2000, Periscope filed a Voluntary Petition under Chapter 7 of the
Bankruptcy Code in the United States Bankruptcy Court for the Southern District
of New York.

    The Company has reclassified its apparel operations for the three months
ended March 31, 2000 as discontinued operations on the Consolidated Statement of
Operations.

                                       6
<PAGE>

                               GIANT GROUP, LTD.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)
               (Dollars in thousands, except per share amounts)

3.   Comprehensive Income (Expense)
     ------------------------------

     The changes in components of comprehensive income (expense), net of
provision (benefit) for income taxes, for the three months ended March 31, 2001
and 2000 are as follows:

<TABLE>
<CAPTION>
                                                                2001                                         2000
                                             -----------------------------------------    -----------------------------------------
                                               Pre-Tax            Tax           Net         Pre-Tax            Tax           Net
                                               Amount          Provision      Amount        Amount          Provision      Amount
                                             -----------     -------------  ----------    -----------     -------------  ----------
<S>                                          <C>             <C>            <C>           <C>             <C>            <C>
Other comprehensive income (expense):
  Unrealized gains on marketable
  securities, net                             $  1,751          $  700       $  1,051        $ 137            $  55       $     82

  Net Loss                                                                       (398)                                        (414)
                                                                            ----------                                   ----------
Comprehensive income (expense)                                               $    653                                     $   (332)
                                                                            ==========                                   ==========
</TABLE>

4.   Commitments and Contingencies
     -----------------------------

     The Company is involved in various claims and legal proceedings which have
been described in the Company's 2000 Annual Report on Form 10-K. There have been
no material changes to these claims and legal proceedings during the three
months ended March 31, 2001.

     Management does not believe that these lawsuits in which the Company is a
defendant, contain meritorious claims. Management is unable to predict the
outcome of these matters at the present time.

5.   Subsequent Event
     ----------------

     On April 20, 2001, the Company announced it's offering to purchase any and
all outstanding shares of its Common Stock and associated Preferred Stock
Purchase Rights for $.50 net per share. The offer to purchase had been
conditioned upon, among other things, the tender by a sufficient number of
stockholders such that following the offer to purchase; GIANT would have less
than 300 shareholders.  On May 8, 2001, the Company amended the offer to
purchase. The Company will now purchase all shares of its Common Stock validly
tendered and not withdrawn prior to May 23, 2001, unless the offer is further
extended or terminated by GIANT. The Company intends to deregister its shares
under the Securities Exchange Act of 1934 and become a private company if the
number of stockholders number less than 300 after the offer to purchase is
completed.

                                       7
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS. (Dollars in thousands except per share amounts)

Results of Operations for the Three-Months Ended March 31, 2001 Versus March 31,
--------------------------------------------------------------------------------
2000)
-----

     General and administrative expenses for the three-months ended March 31,
2001 decreased $179 to $405 from $584 for the comparable period in 2000. This
decrease in general and administrative expenses resulted primarily from lower
corporate salaries and related expenses of $64, lower rent expense of $62 and
decreases in other corporate expenses in 2001 compared to 2000.

Liquidity and Capital Resources
-------------------------------

     Cash and cash equivalents, marketable securities and income tax receivables
at March 31, 2001 totaled  $6,681 compared with $5,439 at December 31, 2000. The
increase in working capital resulted primarily from the appreciation of the
Company's marketable securities, reduced by working capital needed for the
Company's expenses during the current quarter. At March 31, 2001 and December
31, 2000, the Company had working capital of $5,765 and $5,103 with current
ratios of 5.9 to 1 and 9.2 to 1, respectively.

     Net cash used by continuing investing activities for the three-months ended
March 31, 2001 was $36 compared to cash provided by continuing investing
activities of $1,794 for the comparable period in 2000.  Included in continuing
investing activities was cash used for the purchase of marketable securities of
$36 in 2001 compared to proceeds from the sale, net of purchases, of $1,866 in
2000. These proceeds were reduced by capital expenditures of $72 in 2000.

     No cash was provided or used by continuing financing activities for the
three-months ended March 31, 2001 and 2000.

     The Company's current liquidity is provided by cash and cash equivalents,
marketable securities, income tax receivable and investment income.  Management
believes that this liquidity, plus the Company's capital resources, is
sufficient for the Company to fund its current operating expenses and the
offering to purchase any and all outstanding shares of its Common Stock and
associated Preferred Stock Purchase Rights for $.50 net per share, which was
announced on April 20, 2001.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
----------------------------------------------------------

     The Company's primary financial instruments consist of money market funds
paying interest at varying interest rates, equity securities and bond
investments with fixed interest rates. The Company's market risk is the
potential decrease in the value of the Company's financial instruments resulting
from lower market prices. The Company does not enter into derivatives for
trading or interest rate exposure. The Company attempts to make prudent and
informed business decisions before investing in equity securities.

    For the three months ended March 31, 2001, the Company believes there was no
material change in the Company's primary financial instruments and related
market risk.

Personal Holding Company
------------------------

    Under the Internal Revenue Code, in addition to the regular corporate income
tax, an additional tax may be levied upon an entity that is classified as a
"personal holding company". In general, this tax is imposed on corporations
which are more than 50% owned, directly or indirectly, by 5 or fewer individuals
(the "Ownership Test") and which derive 60% or more of their income from
"personal holding company" sources, generally defined to be passive income (the
"Income Test"). If a corporation falls within the Ownership Test and the Income
Test, it is classified as a personal holding company, and will be taxed on its
"undistributed personal holding company income" at a rate of 39.6%.  The Company
currently meets the stock ownership test.  The Company has not met the income
requirement in recent years, therefore is not subject to this additional tax;
however no assurance can be given that the income test will not be satisfied in
the future.

                                       8
<PAGE>

                         PART II.   OTHER INFORMATION


Item 1.  Legal Proceedings.
         ------------------

         For information regarding legal matters, see Note 4 of the Notes to
         Consolidated Financial Statements on page 7 of this Form 10-Q and Item
         3 "Legal Proceedings" as reported in the Company's Annual Report on
         Form 10-K for the fiscal year ended December 31, 2000.

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

    (a)  Reports on Form 8-K

         There were no reports filed on Form 8-K during the first quarter of
2001.

Items 2,3,4 and 5 are not applicable.



                                   SIGNATURE

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.



                                    GIANT GROUP, LTD. - Registrant

                                      By:   /s/ Pasquale A. Ambrogio
                                           -------------------------
                                           Pasquale A. Ambrogio
                                           Vice President, Chief Financial
                                           Officer, Secretary and Treasurer



Date:  May 10, 2001

                                       9