U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                               Amendment No. 4 to

                                   Form 10-KSB

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

     For the Fiscal Year Ended December 31, 2001.

                           Commission File No. 2-69336

                                  CRAMER, INC.

KANSAS                                            I.R.S. Employer Identification
                                                               Number 48-0638707
1222 Quebec Street, North Kansas City, MO 64116
Telephone: (816) 471-4433


Securities registered under Section 12(g) of the Exchange Act:      Common Stock

Check  whether  the issuer:  (1) has filed all  reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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 [_] No [X] (The  issuer's  annual  report on Form  10-KSB for the year ended
December  31,  2000 and the  issuer's  quarterly  report on Form  10-QSB for the
quarter ended April 1, 2001 were filed late.)

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

The issuer's revenues for the 2001 fiscal year were $10,447,000

As of  December  31, 2001 the  aggregate  market  value of the common  shares of
Cramer, Inc. held by non-affiliates was approximately  $40,414.00,  assuming the
market value of Cramer,  Inc. common stock is  approximately  equal to $0.01 per
share at December  31,  2001.  This  valuation  per share was  determined  by an
independent  appraisal of the Company  performed by Meara,  King & Co., a Kansas
City  accounting  and valuation  firm (See Item 5, "Market for Common Equity and
Related Stockholder Matters").

State the number of shares outstanding of each of the issuer's classes of common
equity,  as of the latest  practicable  date:  4,039,607  shares of common stock
(December 31, 2002).

Transitional Small Business Disclosure Format (check one): Yes[_] No [X]





<PAGE>



                                      INDEX



                                                                        PAGE NO.
                                                                        --------

PART I

     Item 1.      Description of Business                                      4
     Item 2.      Description of Property                                     12
     Item 3.      Legal Proceedings                                           12
     Item 4.      Submission of Matters to a Vote of Security Holders         13

PART II

     Item 5.      Market for Common Equity and Related Stockholder Matters    14
     Item 6.      Management's Discussion and Analysis of Financial
                  Condition and Results of Operations                         15
     Item 7.      Financial Statements                                        22
     Item 8.      Changes in and Disagreements with Accountants on
                  Accounting and Financial Disclosure                         38

PART III

     Item 9.      Directors, Executive Officers, Promoters and Control
                  Persons; Compliance with Section 16(a) of the Exchange Act  39
     Item 10.     Executive Compensation                                      39
     Item 11.     Security Ownership of Certain Beneficial Owners and
                  Management                                                  39
     Item 12.     Certain Relationships and Related Transactions              39
     Item 13.     Exhibits and Reports on Form 8-K                            39
     Item 14.     Controls and Procedures                                     40




<PAGE>



                                     PART I



ITEM 1. DESCRIPTION OF BUSINESS

Cramer,  Inc. is a Kansas  corporation  engaged in the  manufacture  and sale of
seating and utility products  designed for office and industrial  settings.  The
Company was established in 1886 as a manufacturer of safes and office  products.
Descendants  of the Cramer  family owned the Company until 1961 when it was sold
to OLIX Industries,  a public company located in Austin, Texas. In January 1981,
OLIX made a public distribution of its Cramer common stock.

Substantial Doubt About the Company's Ability to Continue as a Going Concern

The Company experienced  continued  recurring losses from operations,  cash flow
difficulties and negative working capital during 2000 and 2001. As a result, the
Company is not in compliance  with the financial net worth  covenant in its bank
credit  agreement,  which  includes a  $2,000,000  loan and a  $320,000  line of
credit. The $320,000 line of credit has been classified as  non-performing.  The
Company  earned  net  income of  $87,000  in the first  nine  months of 2002 but
remains in a  liquidity  crisis and has a  substantial  accumulated  deficit and
continued  declines in sales. The Company initially relied on a letter of credit
posted  by  Rotherwood   Ventures,   LLC   ("Rotherwood")  and  subsequently  on
Rotherwood's  pledge of $2M of  securities  to the  lender,  in  addition to the
assets of Pacer,  Inc. a wholly owned  subsidiary of  Rotherwood,  to secure the
Company's $2,000,000 bank loan. This credit facility has been extended to May 3,
2003.  There can be no  assurance  that the Company can further  extend the bank
credit  agreement or obtain  substitute or additional debt financing,  or obtain
any third-party equity financing,  or that a proposed $900,000 equity investment
in the Company by Rotherwood will be consummated (see Item 5- "Market for Common
Equity and Related Stockholder Matters" and Item 6- "Management's Discussion and
Analysis of Financial  Condition and Results of Operations"),  and thus there is
no assurance the Company can remain in business or avoid bankruptcy proceedings.

The primary factors causing the Company's  continued lagging performance include
the  following:  1) The recent  recession and reduction in capital  expenditures
across the country  contributed  to a rapid sales decline,  particularly  in the
seating business,  and 2) Previous  operating  management  allowed the Company's
operations  and  marketing  focus  to  deteriorate.  As a  result,  the  Company
continues to invest in fundamental  restructuring,  which has adversely affected
the pace of new product development and marketing efforts.

The Company's  auditors,  in their  revised  audit report on the Company's  2001
financial  statements,  opined that these  financial  statements and operational
conditions raise  substantial doubt about the Company's ability to continue as a
going concern.  The Company's  previous  auditors also issued a "going  concern"
opinion on our 2000 financial statements (see Item 6 - "Management's  Discussion
and Analysis of Financial  Condition and Results of  Operations",  the financial
statements  and notes thereto in Item 7 and  "Management  Changes and Turnaround
Plan" below).

Management Changes and Turnaround Plan

The Board of Directors  has  responded to the  uncertainty  about the  Company's
continued  viability as a going  concern and the  conditions  which created that
uncertainty  by supporting  ongoing  efforts to reform  operations,  restore the
Company to positive cash flow and profitability and secure adequate financing.

On January 24, 2001,  the Board  appointed a new Chief  Executive  Officer,  who
terminated the executives who served as President and Chief  Operating  Officer,
Chief  Financial  Officer and Vice President of Sales and Marketing  during 1999
and 2000. The Company also eliminated a senior marketing position and changed or
restructured various supervisory  positions.  Two turnaround  professionals were
also  retained  to perform  defined  duties in the areas of  accounting/finance,
production  methodology  and  marketing  strategy.  In November 2001 the Company
hired a new  General  Sales  Manager to focus on overall  sales  management  and
account development.

Following the  appointment of the new CEO on January 24, 2001, the Company's new
management   conducted  a  thorough  review  of  the  Company's  operations  and
strategies.  As a result,  new  management  commenced the following  initiatives
designed to achieve positive cash flow and return the Company to profitability:

     o    The proprietary keyboard line was discontinued

     o    The direct-to-end-user marketing strategy was de-emphasized

     o    Efforts to eliminate  obsolete and weak performing seating and utility
          products have continued o Marketing efforts are being  concentrated on
          the Company's core products and sales channels

     o    Manufacturing and inventory management practices have been improved

     o    The  manufacture  of  certain  utility   products  was  outsourced  to
          third-party  manufacturers  to increase  margins and reduce  operating
          overhead

     o    The Company  reduced its workforce to accommodate  declining sales and
          new production  strategies

     o    The Company has leased a smaller facility to streamline operations and
          achieve greater production efficiencies

     o    The  Company  has begun the process of  identifying  a new  management
          information  system to replace  the  current  legacy  application  and
          improve business processes, reporting and analysis

     o    The Company has reviewed its marketing  strategies  and will implement
          new pricing, discount and commission structures to improve margins and
          simplify the administration of current sales channels

     o    The  Board  will   recommend   that  its   shareholders   approve  the
          authorization  of additional  shares of common stock to  accommodate a
          letter of credit/pledge  fee payable to Rotherwood in common stock and
          a proposed equity  investment in the Company by Rotherwood (see Item 6
          -  "Management's  Discussion  and Analysis of Financial  Condition and
          Results of Operations")

New management will continue to evaluate the Company's products,  operations and
financing  options in an effort to improve the  Company's  performance,  achieve
positive  cash  flow,   restore   profitability  and  secure  adequate  capital.
Management  is  optimistic  these  goals  can be  achieved,  but there can be no
assurance  these  measures will be successful.  In fact, the Company's  revenues
were  substantially  lower, and its gross margins  significantly  lower, in 2001
than 2000 (see Item 6 -  "Management's  Discussion  and  Analysis  of  Financial
Condition and Results of Operations")

The Company intends to enter into a proposed equity investment  transaction with
Rotherwood,  who is  planning  to take the Company  private  after the  proposed
investment  is  made  (See  Item  5-  "Market  for  Common  Equity  and  Related
Shareholder  Matters"  and Item 6-  "Management's  Discussion  and  Analysis  of
Financial Condition and Results of Operations").

Business

The Company is a  manufacturer  that offers two lines of products  with national
distribution.  The largest line consists of various  specialty  seating products
designed  and  positioned  in  the   marketplace   for  intensive  use  or  24/7
application.  The  Company  distributes  seating  products  through  traditional
furniture  channels,   including  independent   manufacturers   representatives,
wholesalers,   dealers  and  catalogs.   End-users   consist  of  a  variety  of
enterprises,  public and private,  including the industrial,  education,  health
care and  government  sectors.  The second line of products  consists of various
utility  products such as  stepladders  and  stepstools,  which are  distributed
primarily through major domestic industrial catalogs.

The  Company's  business is not highly  seasonal,  but  economic  conditions  do
influence purchase behavior by its customers.

The Company's  seating  products  compete in the estimated $11 billion  domestic
market for office  furniture,  which includes seating,  desks,  files, and panel
systems.  Major  companies  serving this market are  Steelcase,  Herman  Miller,
Knoll,  Hayworth,  Kimball,  and HON  Industries.  These  six  companies  supply
products in all major  categories  of this market.  Together they account for an
estimated 60% of sales in this market. The remaining 40% of the market is served
by numerous  smaller  companies  (typically sales of less than $75 million) that
primarily compete in selected segments of the market.  These market segments are
delineated either by product type, such as seating or case goods, or by customer
category, for example high style, wood-finish, or budget-price.

Cramer's seating products are primarily non-wood, characterized by painted metal
finish and  upholstered  seats and backs.  The product  line  includes  standard
height chairs and a wide range of raised  height models and stools.  The Company
also manufactures Clean Room and Electro-Static Discharge seating which meet the
needs of certain specialized manufacturing and research environments.  All offer
ergonomic design with varying degrees of adjustability to accommodate individual
users. The Company's  seating  products are recognized for quality  construction
and lasting durability.

The  Company's  utility  products  include  step  stools  and  aluminum  ladders
featuring the use of retractable  casters.  The design of these products and the
retractable  caster concept are well recognized and accepted in the marketplace.
Certain utility products have been continuously  manufactured by the Company for
sale in the United States since the 1950's.

Product Lines

Office Seating - The Company's  flagship seating product is the Triton(R) chair.
The Company  believes this chair is unique in the industry because it combines a
15-year,  24/7 warranty with steel  structural  components  with full  ergonomic
adjustability.

The  Triton's(R)  design  significantly  upgrades  the  user's  ability  to meet
emerging  ergonomic  adjustability  requirements  yet have a chair that  exceeds
industry durability specifications.  The Triton(R) is designed to meet or exceed
all current  standards of  adjustability  for  prevention of  repetitive  stress
trauma,  including the Human Factors Society standards and the San Francisco VDT
work-station standards; all flame-retarding specifications, including California
TB 117 and  California  TB 133; and industry  testing for strength and component
failure (ANSI/BIFMA  specifications).  Additionally,  a version of the Triton(R)
has been independently certified to pass the more rigorous U.S. General Services
Administration Intensive Use Seating specifications.

Typical  purchasers of the Triton(R) are  health-care  facilities,  professional
offices,  production lines,  airline reservation  centers,  police and emergency
dispatch stations and similar 24-hour use applications.  The Triton product line
includes both a regular size version and a larger version called the Triton Max.
This version was specifically designed to accommodate larger-sized users.

Other significant  seating products include the Fusion II(R), Aspira and Centris
chairs. They are intended to complement the Triton(R) line with its unique steel
seat pan and 24/7  warranty.  Fusion II(R) chairs  provide full  ergonomic  task
seating  at  moderate  prices.  Aspira  and  Centris  chairs  provide  well-made
ergonomic  seating for normal  single-shift use in the workplace.  Each of these
chairs follow the strict  standards for design and function  found in all of the
Company's  active  ergonomic  seating  lines.  These  products  are  designed to
function  within  office,  manufacturing  and laboratory  settings.  The Company
discontinued a number of seating  products in 2000 and 2001 due to lagging sales
and/or unacceptable gross margins.

Utility - The  Company's  utility  products  include the  Kik-Step(R),  a round,
all-steel, 2-step stool that rolls on retractable casters and is frequently used
in libraries, file rooms, and stockrooms. This product was designed by Cramer in
1957 and  continues to be an important  part of the  Company's  product line. In
addition to the Kik-Step(R),  Cramer manufactures several other small stools and
the PAL and StopStep ladders, a series of lightweight aluminum ladders featuring
the same retractable caster concept as the Kik-Step(R).

Industrial  Seating - The Company's  industrial  seating line includes the Rhino
and RhinoPLUS chairs. Both are designed for a more rugged setting than a typical
office  chair.  The Rhino  seating line is  distinguished  by its seat and back,
which  are made from  "tough-skinned"  urethane  foam.  This  technology  offers
industrial-strength  reliability for factory  seating,  including the ability to
easily wash the chair.  The product  line  includes  two sizes of chair or stool
components,  a round backless  stool,  and a sit-stand model designed to relieve
weight from an individual's feet in industrial situations while allowing freedom
for physical activity. The RhinoPlus is a unique product that combines the tough
industrial  strength  urethane  skin of the original  Rhino with a separate soft
padded  foam  cushion.   As  a  result,  the  RhinoPlus  is  significantly  more
comfortable than other urethane chairs currently on the market. This product was
introduced in 2000.

Net sales by product group in 2001 and 2000 were as follows:

                                          Year Ended December 31,
                                      2001                      2000
                                      ----                      ----
     Seating products             $ 6,336,000               $ 8,204,000
     Utility products               4,111,000                 4,893,000
                                    ---------                 ---------
                                 $ 10,447,000              $ 13,097,000
                                 ============              ============

Marketing and Sales

The majority of the Company's  seating  products are sold to independent  office
furniture dealers who resell the products to end-users. Cramer has approximately
1,300 dealer  accounts,  although only a portion of these  accounts is active in
any  given  year.  For the  past  several  years,  sales to  independent  office
furniture dealers have accounted for 60% to 70% of the Company's revenue.  These
sales efforts are focused  through  approximately  21  independent  commissioned
sales  representative  organizations  located in major  markets  throughout  the
United  States.  These  sales  organizations  typically  employ  from one to six
people,  and represent three to six  complimentary  product lines such as desks,
panel  systems,   and  lighting.   Average   tenure  for  the  Company's   sales
representatives  is more than four years.  These  representatives  initiate  and
develop  business  directly  with  end  users,   designers  and  architects  for
specification   projects  and  coordinate  and  manage  the  Company's  business
relationships   with  the  independent   office   furniture   dealers  in  their
territories.

The Company's  utility products are sold primarily to approximately 85 wholesale
and catalog  distributors.  These  distributors  include  office and  industrial
suppliers,  as well as specialty  distributors serving health-care,  scientific,
and safety markets. The Kik-Step(R) stool is also distributed to the home market
through  catalog  distributors.  During  2001,  the Company  achieved  promising
results with  several new  "upscale"  specialty  catalogs.  Other  manufacturers
produce  competing  products,  but these  competitors  have,  thus far, not been
successful  in  significantly  reducing  the  Company's  market share in utility
products. However, there is no guarantee that competitors will not be successful
in reducing the  Company's  market share in the future.  While six wholesale and
catalog  distributors  accounted for 79% of the Company's  2001 utility  product
sales,  no single  customer  accounted for more than 8% of the  Company's  total
sales in 2001.

Cramer  regularly  participates in national  office,  industrial,  and ergonomic
products trade shows and  conferences.  Sales  representatives  display  product
samples and provide demonstration chairs for dealers and end-users.

Sales in the contract  furnishing  industry,  where  Cramer's  seating  products
compete,  follow a pattern of slightly lower volume in the winter and summer and
higher volume in the spring and fall.  Utility product sales are generally equal
through each quarter of the year.

The Company is  currently  in the  process of  creating  new price books for the
seating and utility lines. As part of this process,  the discount and commission
structures  in place for each channel will be updated and  simplified  to enable
more efficient management of sales channel partners.

Manufacturing and Distribution

The Company's  products are fabricated from components such as aluminum  tubing,
plastic forms, foam and fabric purchased from sources locally and throughout the
United States and internationally.

Cramer  understands the importance of developing  partnerships with its vendors,
and has undertaken a program to work closely with suppliers to improve  quality,
delivery, and price, while offering technical assistance and production planning
forecasts. Although this approach includes focusing greater purchases with fewer
vendors,  the Company  believes it retains the ability to change to  alternative
suppliers in most cases.

Certain  components of the Company's  products are sourced from a single vendor.
Any disruption in these supply  arrangements  could result in temporary shipment
delays or increased costs.  However,  the Company believes it has the ability to
substitute suppliers for any component within a three-month period of time.

Production  equipment  used to manufacture  the Company's  products is owned and
maintained  by the Company at its  factory in Kansas  City,  Kansas.  Production
equipment ranges from  metalworking  machinery to a powder coat painting system.
Some of the tooling  used in the  fabrication  of  specialized  and  proprietary
components is owned by the Company but located at vendor locations.  The Company
believes it has sufficient production capacity to support a significant increase
in sales volume.

During 2001, the Company  engaged an overseas  manufacturer  to produce  certain
utility  products  for the  Company.  The  Company  receives  these  products in
finished form and retains  responsibility  for  distribution  to customers.  The
Company has been able to improve  margins  under this new approach and continues
to   explore   additional   outsourcing   opportunities   with  this  and  other
manufacturers.   The  Company  believes  that   successfully   implementing  the
outsourced  manufacture of certain  products will enable the Company to increase
its focus on marketing and distribution and reduce costs.

The Company's promised delivery schedule includes 5-day lead times for orders of
30 units or less. This schedule is significantly  shorter than that offered by a
large portion of the  Company's  competition  and is a competitive  advantage in
certain  situations.  The Company  produces most products to order and maintains
relatively  little  finished goods  inventory,  with the exception of outsourced
products. Some competitors offer a 5-day or "Quick Ship" program;  however, most
of these orders are  fulfilled  from a limited  selection  of product  built for
inventory.  The Company's  larger orders typically are given a 3 week lead time,
which is equal to or better than average for our competition. While the majority
of sales are configured using standard components and options, Cramer is able to
customize product specifications for particular needs. At December 31, 2001, the
Company's  backlog of unfilled  orders was $326,687,  the majority of which were
shipped in the first quarter of 2002.

Employees

In  response  to the  decline  in  sales  and as part of the  Company's  overall
initiative to improve operating efficiencies,  total employment was reduced from
86 as of December 31, 2000 to 55 full time  employees  at December 31, 2001:  21
office,  supervisory  and  managerial  personnel  and 34  production  personnel.
Additional layoffs were implemented in the first quarter of 2002, resulting in a
further  reduction in workforce of 15 employees.  Remaining  employees have been
able to successfully continue required tasks and responsibilities.

Cramer  management  considers the ability to attract,  train, and retain skilled
professional  employees and production  workers to be an important aspect of the
Company's  competitive  advantage.  Management  believes  that it enjoys a good,
interdependent  relationship  with its  employees and has  instituted  personnel
policies  intended  to  maintain  this  relationship.  The  Company  is an equal
opportunity employer and an active non-discrimination policy is integral to this
concept.

The factory  workers are covered by a collective  bargaining  agreement with the
United  Steelworkers of America that expires on September 30, 2003. The economic
portion of the agreement  expired on October 1, 2001 and  subsequently  has been
renewed on a month-to-month  basis. Any work stoppage could impact the Company's
ability to manufacture  product,  on-time  delivery and product  quality,  which
could have a material  adverse  effect on the  Company's  business and financial
condition.  While no work  stoppages  have  occurred over the past ten years and
labor negotiations are an ordinary part of the Company's business,  there can be
no  assurance  that a work  stoppage  can be  avoided.  The State of Kansas is a
right-to  work  state,  so not all  factory  workers  belong  to the  Union.  At
year-end, 16 of the 34 factory workers were not dues paying members. The Company
believes that strong labor relations are an important aspect of its business.

Competition

The domestic ergonomic  furniture market is highly  competitive.  In addition to
its large  competitors  that offer broad lines of  products,  Cramer  frequently
competes   in  its  narrow   market   area   against   similar-sized   specialty
manufacturers.  Cramer  competes by focusing on products  that have high quality
and a reputation  for  long-term  reliability.  The Company also  differentiates
itself by a commitment to customer service and on-time  delivery.  The Company's
110+ year history and the proven  reliability  of its products  support a strong
reputation and product awareness in the marketplace.

Patents, Trademarks and Government Regulation

The name Cramer and the Company's Kik-Step(R),  Triton(R), and Fusion(R) product
names are registered trademarks.  The Company's other office and utility seating
products are marketed  under the Nimbus,  RhinoPLUS  and Rhino  trademarks.  The
Company also considers the overall  design and appearance of the  Kik-Step(R) to
be a trademark of the product.

The  Company  has filed for patent  protection  for the  urethane  skins used in
RhinoPlus seating products.

No government  approval is required for Cramer's  products.  The Company designs
its products to meet voluntary  industry  standards for strength and reliability
(ANSI/BIFMA). The Company maintains ANSI/BIFMA test equipment at its factory and
has   implemented  a  program  of   systematically   testing  its  products  for
reliability.   Certain   products  are  designed  to  meet  the  more   rigorous
requirements of the General Services  Administration.  This provides the Company
with competitive advantages in certain situations.

The Federal  Occupational Safety and Health  Administration  (OSHA) conducted an
inspection  of the  Company  in late  2000  during  which a  number  of areas of
noncompliance   were  detected.   On  April  23,  2001,  the  Company   received
notification  that it was subject to citation and fines totaling  $117,500 based
on these areas of non-compliance.  Prior to receiving the citation,  the Company
had taken proactive steps to correct areas of  non-compliance  identified at the
time of the OSHA site  inspection  and believes  these measures have brought the
Company  into  substantial  compliance.  The Company  requested  a reduction  or
suspension  of the  fines  and  signed a  settlement  agreement  with  OSHA that
requires  total  payments  of $23,000  over two years to settle all  outstanding
fines.  As of June 30,  the  Company  had made  scheduled  payments  of  $2,000.
Management believes modifications to its existing facility and operating methods
required to bring the Company into OSHA  compliance,  and compliance  with other
laws and  regulations,  will not have a material  adverse  effect on its overall
business.  An accrual of $23,000 was  recorded at December 31, 2001 for the OSHA
settlement.

Environment

The  Company's   production   processes  use  several   hazardous  or  polluting
substances.  Employees  are provided  protective  clothing and  equipment  where
necessary or appropriate, such as breathing masks on the paint line. Disposal of
wastes is conducted according to applicable  regulations using authorized and/or
licensed  vendors  where  required.  These  substances  are commonly used in the
industry and the Company does not use them in great quantity.  Accordingly,  the
impact of environmental compliance costs on the Company's operations is believed
to be minimal.

ITEM 2. DESCRIPTION OF PROPERTY

The  Company's  corporate  headquarters  and  manufacturing  facility  have been
located on a 5-acre tract at 625 Adams  Street,  Kansas  City,  KS in a building
owned and occupied by the Company since 1957.  This facility  comprises  165,000
square feet, including 20,000 office, 2,000 showroom,  and 143,000 manufacturing
space.

Due to the facility's age, its overall condition is relatively poor and requires
continuous maintenance.  The Company believes that its facilities are adequately
insured.

In the first quarter of 2002,  management  began  exploring the  feasibility  of
relocating  to a new facility that more closely  matches the  Company's  current
size and manufacturing needs. The Company has signed a lease for a 34,000 square
foot facility and relocated in September  2002.  The minimum lease term is three
years with the right to extend for an additional eight years. Annual rent during
the initial term is $111,000/ year. The Company  anticipates that relocating the
business could reduce operating  overhead  significantly and improve  production
efficiency.  However,  there is no  assurance  we can sell or lease our existing
facility without spending significantly on renovation.

ITEM 3. LEGAL PROCEEDINGS

The Company is a defendant  in several  lawsuits  relating to product  liability
claims arising from accidents  allegedly occurring in connection with the use of
its products.  The claims are covered by insurance and are being defended by the
Company's  independent counsel or by counsel assigned by the Company's insurance
carriers.  These  claims are subject to  deductibles  ranging from $0 to $50,000
($50,000 is the most common deductible). The Company maintains product liability
insurance  coverage  with  limits of $1 million  per  occurrence  and $2 million
aggregate,  plus $10  million  in  umbrella  coverage.  After  the  Company  has
exhausted its deductible by paying a total of $50,000 (whether in legal fees and
expenses, settlement amounts, damages awards, or any combination thereof) on any
single claim, its liability  insurance carrier is obligated to pay any sums owed
for legal fees and expenses,  settlement amounts and damages awards in excess of
$50,000 for that claim.  The  Company has been able to offset  settlement  costs
through amounts paid by co-defendants in certain cases historically.

Over the last five fiscal  years,  the Company has  averaged  3.7 new claims per
year. An average of approximately  50% of those claims resulted in defense costs
and settlement  amounts or awards exceeding  $50,000.  The average total cost of
defense and  settlement  awards paid by the Company over that period was $35,000
per claim.  On average,  approximately  half of the costs per claim  represented
settlement  awards and the other  half  represented  legal  defense  costs.  The
Company's  claims  history  has  leveled out over the past three years to two to
three new claims  per year.  The number of new  claims  made or  lawsuits  filed
against the Company during years 2000 and 2001 were two and three, respectively,
which  reflects a reduction in claims  experience  compared to prior years.  The
Company  settled  two  claims  during  2000 and four  claims  during  2001.  The
Company's  average  out-of-pocket  cost per settled claim was $7,500 in 2000 and
$41,000 in 2001.

The Company  had six open  claims at December  31, 2001 and seven open claims at
December 31, 2000. The Company has incurred  aggregate defense costs of $115,200
with respect to the six open claims at December  31, 2001,  $66,300 of which has
been paid by the Company and $48,900 has been paid by  insurance  carriers.  The
Company  does not  believe  these open  claims  will have  materially  different
average  results than the historical  experience  described  above.  None of the
claims  allege  damages  in excess of policy  limits.  However,  several  of the
claimants allege substantial  damages. The largest such claim alleged damages of
$375,000  and is  discussed  separately  below.  While  management  believes the
Company has  substantial  defenses  with respect to these  claims,  the ultimate
outcome of such litigation  cannot be predicted with certainty.  Such claims are
an ordinary aspect of the Company's business and industry.  The Company believes
its products are safe and reliable  when  assembled,  used and  maintained  in a
reasonable  manner,  and believes it adequately  reserves against its reasonably
likely exposure under these claims based upon past experience.

The Company  discusses each claim with its legal counsel to determine the merits
of the case and the most likely outcome.  In some cases, it is too early to make
that assessment. At December 31, 2001, unless specific information pertaining to
the case indicated a higher or lower amount was required, a specific reserve for
each case was  calculated,  equal to the  historical  average cost per completed
case of $35,000 less costs  incurred to date. The insurance  deductible  amounts
were also  considered in each case. The Company  recorded a reserve for specific
claims of $105,000 at December 31, 2001.

In addition to reserves for specific cases,  the Company  estimates its exposure
for unasserted claims and records  additional  reserves using the claims history
discussed  above as well as recent  trend  insights.  The Company  had  received
notice of six  incidents  for which no claims had been  asserted at December 31,
2001.  The  Company  recorded a reserve  for  unasserted  claims of  $113,000 at
December 31, 2001.

Although the  Company's  claims  history has  stabilized  in recent  years,  the
Company cannot be certain that future claims  experience will be consistent with
historical claims  experience.  Any increase in the frequency or average cost of
future  claims  could  increase  the  Company's  exposure  to product  liability
expense.  However,  the maximum total legal defense cost,  settlement  costs and
damages awards for each claim is limited to the $50,000  deductible.  Management
does not anticipate  that future product  liability  claims will have a material
adverse effect on the Company's operating results and liquidity.

On February  25,  1998,  the Company was served with a suit filed by Pauline and
Daniel  Robitaille in the Superior Court of Massachusetts,  Norfolk County.  The
claim alleged damages of $375,000 due to personal injury.  The Company's $50,000
self-insured retention was exhausted and the Company's insurance carrier assumed
defense  of  the  claim.  The  Company   therefore  has  no  further   financial
responsibility for this claim. The case was recently settled by the carrier.

The  Company  was  assessed  $117,500  in  penalties  by OSHA as a result  of an
inspection  conducted in 2000 and signed a settlement  agreement with OSHA which
calls  for  payments  of  $23,000  (see  "Patents,   Trademarks  and  Government
Regulation" in Item 1). As of June 30, the Company had made  scheduled  payments
of $2,500.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None



<PAGE>



                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Cramer's  common  stock is not listed on NASDAQ or any  exchange and there is no
public trading market for the stock.

As of December 31, 2001, there were 746 shareholders of record.

Since being  publicly  held,  the Company has never paid cash dividends and does
not  anticipate  paying  any  cash  dividends  in the  foreseeable  future.  The
Company's ability to pay cash dividends on its common stock will depend upon its
capital surplus, loan covenants and cash requirements.

Odd Lot Tender Offer

In the fourth quarter of 2001, the Board approved an "Odd Lot" Tender Offer,  in
which the Company  offered to purchase  the shares held by  shareholders  owning
fewer than 100 shares.

There are two reasons the Board undertook this offer.  First,  since there is no
trading in Cramer  Inc.  stock,  shareholders  have not had a way to trade their
shares in order to  recognize  any income tax loss they may have in their stock.
This offer provided "Odd Lot" holders a method to do this.  Second,  the Company
continues  to look for every  cost  saving it can find.  "Odd Lot"  shareholders
represented  35% of all  shareholders.  The Company's  intention was to save the
annual expenses associated with reporting to these shareholders.

Since Cramer's stock is not traded on NASDAQ or any exchange, there is no market
for the stock and it is difficult to know its value.  Cramer hired Meara, King &
Co., a Kansas City  accounting and valuation  firm, to analyze the current value
of Cramer and its stock. The results of their study, which included, among other
considerations,  earnings tests and asset  appraisals,  valued the stock at $.01
per share.  The Company offered to pay $.015 per share in cash to each "Odd Lot"
shareholder. In recognition of this low value, the Company also agreed to send a
Kik-Step to every "Odd Lot" shareholder who accepted this offer.

48 "Odd Lot"  shareholders,  holding an aggregate of 1,889 shares,  accepted the
offer and tendered  their shares to the Company for an aggregate  purchase price
of $28.34  plus  Kik-Steps  valued at $2,400.  The Odd Lot  Tender  Offer is now
closed.

Meara,  King & Co.  performed an update of its  valuation in July 2002 and their
assessment of the updated value remained $0.01 per share.



Going Private Transaction


As a result of the Company's  tenuous  cash/liquidity  position and its need for
additional  capital to execute its  restructuring  plans,  the Company  plans to
enter into an investment  transaction  with  Rotherwood.  Rotherwood  intends to
purchase  18 million  shares of newly  issued  Company  common  stock for a cash
purchase price of $.05 per share. This equity investment of $900,000 would allow
the Company to  substantially  reduce its bank debt and  restructure its balance
sheet. Upon Rotherwood's  purchase of the shares,  combined with the issuance of
800,000  shares  of  common  stock  per  quarter  in  payment  of  a  letter  of
credit/pledge  fee to  Rotherwood,  Rotherwood  would  own more  than 90% of the
Company's  outstanding shares of common stock.  Rotherwood then plans to cause a
"short-form"  merger to occur in which each  outstanding  share of the Company's
common stock owned by shareholders other than Rotherwood would be converted into
the right to  receive a cash  payment  of $.05 per share for an  aggregate  cash
consideration  of  $98,000,  after  which  Rotherwood  plans to take the Company
private.  The Company plans to amend its articles of  incorporation  to increase
its  authorized  shares of common stock from  8,200,000 to 74,200,000  shares to
permit  Rotherwood  to acquire the 18 million  shares of common stock and permit
Cramer  to  pay  the  800,000  share  quarterly  letter  of  credit/pledge  fee.
Rotherwood  intends to enter into such a transaction,  but is not subject to any
binding  obligation to do so. The Company has incurred  substantial  expenses in
connection  with its  relocation  to a smaller,  more  efficient  facility.  The
Company has not had sufficient cash to pay those expenses.  In November 2002 the
Company  borrowed  $125,000 from Rotherwood in the form of a demand note bearing
interest at 7% to cover a portion of its relocation expenses. Rotherwood intends
to convert this  $125,000  demand note into common stock as part of the $900,000
proposed  investment  discussed above.  See Item 6- "Managements  Discussion and
Analysis of Financial  Condition and Results of Operations"  and the Transaction
Statement on Schedule  13E-3,  filed on behalf of the Company,  Rotherwood,  and
Rotherwood Investments, LLC and incorporated by reference herein, for additional
information regarding the proposed equity investment,  cash-out merger and going
private transaction.




<PAGE>


ITEM 6. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS


A.   Forward Looking Statements

     Except for the historical information contained herein, this report on Form
     10-KSB   contains   forward-looking   statements  that  involve  risks  and
     uncertainties.  The Company's  actual results could differ  materially.  In
     connection  with the "safe  harbor"  provisions  of the Private  Securities
     Litigation  Reform Act of 1995,  Cramer reminds readers that there are many
     important  factors that could cause the Company's  actual results to differ
     materially from those projected in  forward-looking  statements made by, or
     on behalf  of,  the  Company.  When used in this Form  10-KSB  and in other
     filings by the Company with the Securities and Exchange Commission,  in the
     Company's  press releases and in oral  statements made with the approval of
     an  authorized  executive  officer,  words or phrases  such as "will likely
     result",  "expects",  "are expected to", "will continue", "is anticipated",
     "estimate",  "project"  or similar  expressions  are  intended  to identify
     forward-looking  statements.  The Company wishes to caution  readers not to
     place undue reliance on such forward-looking statements.

     There are a number of reasons why investors should not place undue reliance
     on forward-looking statements. Among the risks and uncertainties that could
     cause the Company's actual results for future periods to differ  materially
     from any forward-looking statements made are the following:

     o    The inability of shareholders  other than Rotherwood to participate in
          any  future  improvement  in the  Company's  operations  or  financial
          condition, if the short-form merger is consummated

     o    The  Company's  continuing  declines in revenues and history of losses
          and uncertain  future  profitability

     o    Questions about the Company's  continuing viability as a going concern
          and management's plans to address that issue

     o    Any failure of the Company's turnaround plan to achieve its objectives

     o    The  possibility  that the bank will not renew  the  Company's  credit
          facility

     o    The Company's lack of prospects for obtaining substitute or additional
          debt financing, or obtain any equity financing from a party other than
          Rotherwood

     o    The  possibility  that  the  bank may  call  the  credit  facility  if
          Rotherwood does not make the proposed equity investment in the Company
          or Rotherwood decides not to continue the securities pledge

     o    Rotherwood's intention to take the Company private

     o    Fluctuations or reductions in product demand and market acceptance

     o    Continued adverse conditions in the office furniture industry

     o    The level of product development by the Company

     o    Capacity, facility and supply constraints or difficulties

     o    The effect of new laws and regulations

     o    Unexpected additional expenses or operating losses

     o    Strong competition

     o    Reliance on certain vendors for key products and components

     o    Deferred  maintenance  at the Company's  owned  facility from which it
          recently  relocated,  the  potential  need to renovate the facility in
          order to sell or lease it, and the cost of future  maintenance at that
          facility

     o    If product and warranty liability claims exceed the amounts reserved

     o    Control by insiders

     The foregoing list of risks and uncertainties is not meant to be complete.

B. Questions About the Company's Ability to Continue as a Going Concern

     In light of our  continuing  losses  and  negative  cash flow and the other
     contingencies  cited in Item 1 -  "Business -  Substantial  Doubt About the
     Company's  Ability to Continue as a Going Concern" and in the report of our
     independent  auditors on our 2001 financial  statements,  our auditors have
     issued a "going  concern"  opinion on our 2001  financial  statements  that
     raises substantial doubt about the Company's ability to continue as a going
     concern.  The  Company's  management  are  performing a thorough  review of
     Company operations and implementing a turnaround plan with the objective of
     generating  positive cash flow and returning the Company to  profitability.
     The Company  suffered a substantial  reduction in 2001  revenues,  which is
     making this task more difficult. If management is unsuccessful in achieving
     these objectives,  or if the Company cannot obtain new or increased debt or
     equity  financing,  the Company may not remain viable and may have to cease
     operations or find a buyer for the Company, which cannot be assured. If the
     short-form   merger  with  Rotherwood  is  consummated  and  the  Company's
     turnaround  plan is successful,  shareholders  will not receive any benefit
     from that success,  but will not bear the risk of any continuing  losses by
     the Company.

C. Summary of Operations

     Comparison of Fiscal Year 2001 vs. Fiscal Year 2000

     Net sales decreased in 2001 to $10,447,000,  a decline of $2,650,000 or 20%
     from 2000.  This  decrease  was due to the  following  factors:  1) Seating
     products  declined by 24% overall,  primarily  due to lagging  sales of the
     Triton and Aspira  lines.  These  products  were  impacted  directly by the
     recent  recession and are subject to more intense  competition.  A $301,500
     increase in the Rhino product line offset the overall seating decline.  The
     Rhino Plus was  introduced  in 2000 and  continued to  experience  improved
     market  acceptance.  2) Utility products declined  consistently  across all
     models,  decreasing by 15% as a group.  The weaker  performance  of catalog
     distributors as a whole contributed to the decline.

     The  Company's  order backlog at December 31, 2001 of $326,687 was $826,313
     lower than  December  31,  2000  backlog,  a 69%  decline.  This could mean
     further reduction in 2002 revenues.

     Gross margins  declined from $3,341,000 in 2000 to $2,314,000 in 2001. As a
     percent of sales, Gross margins were 22% in 2001,  compared to 26% in 2000.
     Lower  margins as a percent of sales were the combined  result of increased
     freight and material  costs,  less efficient  utilization of plant overhead
     due to lower sales volume and adjustments to warranty reserves.

     Operating expenses declined in total by $620,000 from $3,916,000 in 2000 to
     $3,296,000 in 2001.

     General  and  administrative  costs were  $1,273,000  in 2001  compared  to
     $1,222,000  in  2000,  an  increase  of  $51,000.   The  following  factors
     contributed to higher general and administrative  costs: 1) The Company had
     significant   payroll   severance  costs  associated  with  the  management
     restructuring  discussed  in Item  1. 2)  Legal  costs  were  significantly
     higher,  due  primarily  to costs  associated  with  the  OSHA  settlement,
     significant layoffs, the Odd Lot Tender Offer and additional  assistance in
     preparation  of the 2000 10KSB and 2001 and 2002 proxy  statements in light
     of the additional disclosures resulting from the Company's recent problems,
     and 3) The Company  incurred an $8,000 charge in connection with the letter
     of credit provided by Rotherwood (see "Financial  Condition,  Liquidity and
     Capital Resources" below).

     The Company had no charges for  impairment  of assets in 2001,  compared to
     $289,000 of asset impairment  charges in 2000 associated with the write-off
     of intangible assets related to the discontinued keyboard business.

     Selling expenses declined from $2,405,000 in 2000 to $2,023,000, a decrease
     of  $382,000.  The  most  significant  factor  was a  decrease  in costs of
     $271,000 in 2001 as a result of closing the  Minneapolis  sales  office and
     ceasing  related   direct-to-end  user  sales  and  marketing  efforts.  In
     addition,  direct mail and  marketing  literature  costs  declined in 2001.
     These  decreases were offset by increased  catalog program costs and higher
     personnel   and   consulting   costs   associated   with   the   management
     restructuring.

     Interest expense decreased from $222,000 in 2000 to $174,000 in 2001. While
     the credit  facility  balance was higher on average  throughout  2001,  the
     interest  rate is tied to the prime  rate,  which  decreased  significantly
     throughout 2001.

     The Company incurred a net loss before tax of $1,170,000 in 2001,  compared
     to a loss of  $1,017,000  in 2000.  Included  in the 2000 loss  were  total
     charges for the  discontinued  keyboard  business of $363,000,  including a
     write-off of long-term assets and accounts receivable.

     Comparison of Fiscal Year 2000 vs. Fiscal Year 1999

     At  $13,097,000,  net sales in 2000  increased by $404,000,  or 3.2%,  over
     1999. This increase was due to an 18% increase in sales of utility products
     to catalog  distributors.  The increase in utility products was offset by a
     4% decline in sales of the  Company's  seating line to  furniture  dealers.
     This  decrease was  primarily  due to greater  competition  in the 24 hour,
     heavy duty seating market which affected the Company's Triton seating line.

     The Company's order backlog at the end of December 2000 was $1,189,000,  an
     increase of $189,000 over 1999.

     As a percentage of net sales,  gross margins in 2000 were 25.5% as compared
     to 28.2% in 1999.  This decrease in gross margins was largely the result of
     three  factors:  (1) a  write-down  of raw  materials  and  finished  goods
     inventory  due  to  product  discontinuance  and  obsolescence,   including
     abandonment of the  proprietary  keyboard  line,  (2) additional  inventory
     carrying costs associated with the unsuccessful  implementation of a Kanban
     production control system, and (3) decreased direct labor productivity.

     Total  operating   expenses  during  2000  were  $3,916,000,   compared  to
     $3,675,000 during 1999.

     Fiscal  year 2000  interest  expense of  $222,000,  when  compared  to 1999
     interest  expense  of  $122,000,  increased  by  $100,000.  In light of the
     Company's  cash flow  difficulties,  the  Company  has been  utilizing  the
     Rotherwood  revolving line of credit more extensively,  as evidenced by the
     comparison  of year ending  borrowing  balances of  $2,302,000  in 2000 and
     $1,842,000 in 1999.

     The Company incurred a net loss before tax of $1,017,000 in 2000,  compared
     to a loss of  $292,000  in 1999.  Included in the 2000 loss are charges for
     the discontinued  keyboard business totaling  $363,000.  Additional charges
     for bad debt expense and obsolete  inventory  totaled $19,000 and $219,000,
     respectively.

D. Accounting Estimates

     Accounting  estimates are an integral part of the financial  statements and
     are based on management's  knowledge and experience  about past and current
     events and assumptions about future events.  Certain  accounting  estimates
     are particularly  sensitive because of their  significance to the financial
     statements and because of the possibility that future events affecting them
     may differ significantly from those expected.  The most sensitive estimates
     affecting the financial  statements were the warranty and product liability
     accruals, and the inventory reserve.

     The Company  offers product  warranties  with terms of up to fifteen years.
     The majority of the  Company's  warranty  claims  relate to failed  seating
     parts. The Company estimates its accrual for future warranty costs based on
     durability  testing,  engineering  studies,  actual costs incurred in prior
     years,  warranty terms and historical sales data. We increased our warranty
     accrual  from  $100,000  at December  31, 2000 to $232,000 at December  31,
     2001.  This increase can be attributed in part to the  introduction  of new
     chair models with more extensive warranties, along with changes to existing
     product  warranties that increase the Company's  warranty expense exposure.
     For example, the warranty on certain models was increased to cover 24X7 use
     in the field.  These  warranty  changes  were  implemented  to solidify the
     Company's  reputation in the market as a premium supplier of intensive task
     seating.  The increase in the warranty  accrual also reflects  management's
     re-evaluation of cost exposure and desire to be conservative.  The increase
     was not the  result  of  escalating  warranty  costs,  as  warranty  claims
     remained consistent in 2001.

     The reserve for obsolete and slow-moving inventory is based on management's
     analysis of inventory turns, historical write-offs, future production plans
     including  any product  line  changes,  and sales  trends.  The decrease in
     inventory  reserves  from  $162,000 at December  31, 2000 to $110,000 as of
     December 31, 2001 was the result of an overall  decrease in inventories due
     to declining sales and production.


E. Financial Condition, Liquidity and Capital Resources

     Cash flow from operations  improved from a deficit of $295,000 in 2000 to a
     surplus of $580,000 in 2001.  The increase in cash from  operations was due
     primarily to reductions of inventories and accounts receivable.

     Accounts  receivable  totaled  $563,000  at December  31, 2001  compared to
     $1,509,000  at December 31, 2000.  The decline was a  combination  of lower
     December  sales in 2001 compared to the prior year and improved  collection
     results. Days' sales outstanding decreased from 43 in 2000 to 36 in 2001.

     Inventories  declined  from  $1,558,000 at December 31, 2000 to $721,000 at
     December 31, 2001, a 54%  decrease.  A general  decline in sales,  combined
     with efforts to manage  purchasing more tightly  contributed to the change.
     In addition, raw and WIP inventories were increased at December 31, 2000 to
     support a large, end-of-year chair order.

     Accounts  payable  and  accrued  liabilities  declined  $313,000  in  2001,
     primarily as a result of reduced production levels.

     Capital   expenditures   of  $30,000  during  2001  related   primarily  to
     manufacturing equipment and plant updates.

     The  Company   participates  with  Pacer   Corporation,   an  affiliate  of
     Rotherwood,  in a combined credit  facility of $2,320,000  (consisting of a
     $320,000  revolving line of credit and a $2,000,000  loan) which is secured
     by  substantially  all of the assets of the Company and Pacer.  The Company
     borrowed an additional  $18,000 from its combined  bank credit  facility in
     2001,  increasing  the total  outstanding  balance  to the  maximum  amount
     allowed under the  agreement,  or $2,320,000.  The $2,000,000  loan is also
     secured by  Rotherwood's  pledge of  $2,000,000 in securities as collateral
     for the loan. The $2,000,000 securities pledge replaced a $2,000,000 letter
     of credit  previously  posted by Rotherwood in favor of the lender.  Cramer
     and Pacer are jointly  liable for principal  and interest  under the loans,
     and each company may obtain advances under the loans. However,  because all
     existing  advances  under the loans  have  been made to  Cramer,  Cramer is
     currently making all interest payments under the loans. The loans are fully
     drawn,  and thus neither company may obtain any further  advances under the
     loans unless and until the principal amounts are reduced. The loans matured
     on  January  27,  2002 and  have  been  temporarily  extended  at  periodic
     intervals, with the latest extension expiring on May 3, 2003.

     The loan  agreement  provides  that the bank may declare a default and call
     and  accelerate  the  loans if there is a  material  adverse  change in the
     business,  properties,  financial condition or affairs of Cramer,  Pacer or
     Rotherwood.  The bank  also has the  right to call the loans if the bank in
     good faith deems itself  "insecure."  In light of these  provisions  in the
     loan agreement (the  "MAC/Insecurity  Clause") and the Company's  financial
     condition,  declining sales and history of losses,  the bank could call the
     loans at any time even if Cramer is current on its debt service obligations
     and Cramer and Pacer have not  violated  any other  provisions  of the loan
     documents.

     In  addition,  Cramer  and Pacer are not in  compliance  with the  $500,000
     financial net worth covenant under the loans,  and the $320,000 credit line
     has been  classified as  non-performing.  The lender has requested that the
     Company  either  reduce the  principal  balance of the  $320,000  revolving
     credit line or provide  additional  collateral in the form of a guaranty or
     additional security by May 3, 2003, and the Company believes the lender may
     call  that  loan  if it did not pay  off  the  loan or  provide  additional
     security  by that date.  The  Company  does not  believe it will be able to
     reduce the $320,000 line of credit balance or provide  additional  security
     by that  date.  The  Company  does not  believe  the  lender  will call the
     $2,000,000  loan so long as Rotherwood  maintains its securities  pledge as
     collateral for that loan; however,  Rotherwood has advised the Company that
     it does  not wish to  continue  the  securities  pledge  indefinitely.  The
     Company  does not  have  sufficient  assets  to pay off the  loans,  so any
     acceleration of either or both loans by the bank could force the Company to
     declare  bankruptcy,  cease  operations and liquidate.  If the bank were to
     call the  $2,000,000  loan and  foreclose  upon the  collateral  posted  by
     Rotherwood,  Rotherwood  could succeed to the bank's position as the lender
     on that loan,  call the loan and proceed  against the  Company's  assets in
     satisfaction  of the loan.  Rotherwood has no personal  liability under the
     $2,000,000  loan in  excess  of the value of its  pledged  collateral.  The
     Company  believes  that the latest loan  extension  granted by the bank was
     made with the expectation that the principal balance of the $320,000 credit
     line  would  be  reduced  or that  the  Company  would  provide  additional
     collateral  or  guarantees  on the $320,000  credit line by the May 3, 2003
     extended maturity date.

     A letter of credit in the amount of  $139,000,  which had  previously  been
     issued on behalf of Pacer under the credit facility, has expired. Pacer has
     no indebtedness or letters of credit issued under the credit facility.  The
     Company, having access to Pacer's financial condition and management plans,
     believes  Pacer has no  intentions  of using the credit  facility,  even if
     amounts  drawn by  Cramer  under  the  credit  facility  were less than the
     maximum amount allowed.

     In  exchange  for  Rotherwood's  financial  accommodation  to the  Company,
     without which the bank would probably call the $2,000,000 loan, the Company
     agreed to pay  Rotherwood a fee equal to 2% per quarter of the total amount
     of the  letter  of  credit/securities  pledge  until the  pledge  agreement
     expires.  Rotherwood  agreed to accept  800,000  shares of common stock per
     quarter in payment of the guarantee fee at an agreed upon exchange value of
     $0.05 per share as the Company is not  generating  sufficient  cash flow to
     pay the fee in cash.  This  agreement  took effect on October 1, 2001.  The
     Company has sufficient authorized Common Stock to pay the letter of credit/
     securities  pledge fee for two quarters  (1,600,000  shares),  but will not
     have sufficient  authorized  Common Stock to pay the fee for any additional
     quarters or to issue the 18 million  shares of Common  Stock to  Rotherwood
     (see  discussion  below  regarding  the  proposed  increase  in  authorized
     shares).

     The Company  originally  accrued  guarantee  fees of $40,000 for the fourth
     quarter of 2001 and  $40,000 in each of the first and  second  quarters  of
     2002  based upon the $0.05 per share  exchange  rate.  The  Company in 2001
     obtained an independent  appraisal  which  determined  that the fair market
     value of the  Company's  common stock was $0.01 per share.  The Company and
     Rotherwood  determined that the $0.05 per share exchange rate would be less
     dilutive to the Company's  shareholders  other than Rotherwood (the "Public
     Shareholders"),  because it would  result in fewer  shares  being issued to
     Rotherwood each quarter  (800,000 shares) than if the shares were valued at
     an exchange rate of $0.01 (4,000,000 shares).  The $0.05 per share exchange
     value was also consistent with the price per share being paid by Rotherwood
     for 18  million  new  shares of the  Company,  and the price  being paid by
     Rotherwood to the Public  Shareholders in a proposed  cash-out  merger,  as
     described  below.  The Company has since  determined that the guarantee fee
     should  have been  recorded  on the basis of the fair  market  value of the
     consideration being paid to Rotherwood in the form of common stock ($8,000,
     or  800,000  shares x $0.01  per  share)  rather  than on the  basis of the
     exchange rate agreed to by Rotherwood  ($40,000,  or 800,000 shares x $0.05
     per share).  The effect of this  accounting  change is to decrease  accrued
     expenses and  decrease  net loss by $32,000 for the fourth  quarter of 2001
     and to decrease accrued expenses and increase net income by $32,000 in each
     of the first two quarters of 2002.  The Company has restated the  financial
     results reported in its 2001 Form 10-KSB/A and its first and second quarter
     2002 Form 10-QSB's to reflect this change in accounting  treatment  related
     to the guarantee fee.

     Management  believes that the Company would not be able to secure financing
     of this  nature  without  the  credit  enhancements  provided  by Pacer and
     Rotherwood.  Management  also  believes  that access to this larger  credit
     facility more than offsets the risk of potential  exposure  associated with
     Pacer's  ability  to utilize  the credit  facility  as a  co-borrower.  The
     interest  rate charged on $2,000,000  of  outstanding  borrowings is at the
     Bank's prime interest rate and the remaining  $320,000 is at the prime rate
     plus 2%.  Management  believes this is a lower combined  interest rate than
     the rate Cramer would be required to pay if it tried to finance its working
     capital needs by itself.

     The Company  believes  significant  investments in property,  equipment and
     working  capital will be required to execute its  operating  plans in 2002.
     Among  the  anticipated  requirements  are  the  cost  of a new  management
     information  system,  costs  associated  with  the  planned  relocation  of
     operations,  final  production  and  printing  of the new  price  book  and
     increased  investment in inventory as a result of outsourced  manufacturing
     initiatives  discussed  in Item 1.  Management  believes  the cost of these
     initiatives  as a whole could total  $300,000 or more. The Company will not
     be able to implement these  initiatives if it cannot obtain an increase and
     extension  of the credit  facility  or the  Rotherwood  investment  doesn't
     materialize.  The Company has incurred  substantial  expenses in connection
     with its relocation to a smaller, more efficient facility.  The Company has
     not had sufficient cash to pay those expenses. In November 2002, Rotherwood
     advanced  $125,000  to enable the Company to pay the  relocation  expenses.
     Upon  consummation  of the 18  million-share  purchase by  Rotherwood,  the
     $125,000 advance will be credited  against the $900,000  purchase price for
     the shares.

     Management  believes  that the  turnaround  plans  discussed in Item 1 will
     improve  operations  significantly,  and in some cases these  efforts  have
     already had a positive impact on the Company's performance,  although there
     was a substantial  decrease in sales for 2001.  However,  since the Company
     has no additional  borrowing capacity and there is no assurance the Company
     can obtain an extension of or increase in the current credit  facility or a
     substitute credit facility, the Company will seek needed additional capital
     by selling shares of common stock to  Rotherwood.  Although the Company has
     no definitive agreement with Rotherwood, the Company is planning to sell 18
     million  shares of Common Stock to Rotherwood  for cash at a purchase price
     of $0.05 per share.  This transaction would provide $900,000 in much needed
     capital to the Company to reduce amounts owed under the bank line of credit
     and credit  Rotherwood  for a $125,000  advance  used by the Company to pay
     relocation expenses. If Rotherwood makes an additional equity investment in
     the  Company,  Rotherwood  plans to take the  Company  private  following a
     short-form cash-out merger of the Company into Rotherwood.

     The  Company  does not have a  sufficient  number of  authorized  shares of
     Common Stock to complete such investment transaction.  For this reason, the
     Board of Directors considers it advisable to increase the authorized shares
     of  Common  Stock  and is  planning  to  bring  this  matter  to a vote  of
     shareholders at the upcoming Annual Meeting.

     If the proposed equity  investment by Rotherwood is not consummated for any
     reason,  the uncertainty  regarding the Company's  ability to continue as a
     going concern will continue and may increase.  The continuing  viability of
     the  Company as a going  concern  will  depend on  management's  ability to
     increase  sales,  achieve  positive  cash  flow,  restore  the  Company  to
     profitability,  extend its credit facility and/or obtain additional debt or
     equity  financing,  none of which can be assured.  However,  if  Rotherwood
     makes the proposed  equity  investment and effects the cash-out  merger and
     takes the Company  private,  the Public  Shareholders  would not derive any
     benefit from any turnaround of the Company.




ITEM 7. FINANCIAL STATEMENTS

The following financial statements of Cramer, Inc. are included herewith:


                                TABLE OF CONTENTS
                                                                          Page
                                                                          -----

Independent Auditors' Report - 2001                                        F-1

Independent Auditors' Report - 2000                                        F-1a.

Financial Statements:

   Balance Sheets                                                          F-2

   Statements of Operations                                                F-3

   Statements of Stockholders' Equity (Deficit)                            F-4

   Statements of Cash Flows                                                F-5

   Notes to Financial Statements                                           F-6





<PAGE>


                                                                             F-1


To the Board of Directors and Stockholders
Cramer, Inc.
Kansas City, Kansas

                          INDEPENDENT AUDITORS' REPORT


We have audited the accompanying balance sheet of Cramer, Inc. (a majority-owned
subsidiary of Rotherwood Ventures, LLC) as of December 31, 2001, and the related
statements of operations,  stockholders' equity (deficit) and cash flows for the
year then  ended.  These  financial  statements  are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial  statements  based on our audit.  The financial  statements of Cramer,
Inc. as of December 31, 2000,  were audited by other auditors whose report dated
May 4, 2001, on those statements  included an explanatory  paragraph  describing
conditions that raised substantial doubt about the Company's ability to continue
as a going concern.

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

In our opinion,  the 2001 financial  statements  present fairly, in all material
respects,  the financial  position of Cramer,  Inc. as of December 31, 2001, and
the  results  of its  operations  and its cash  flows for the year then ended in
conformity with accounting principles generally accepted in the United States of
America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 1 to the
financial statements, the Company's recurring losses from operations,  cash flow
difficulties,  negative working capital,  stockholders'  capital  deficiency and
lack of compliance with debt covenants raise substantial doubt about its ability
to continue as a going concern.  Management's plans concerning these matters are
also  described  in  Note  1.  The  financial  statements  do  not  include  any
adjustments that might result from the outcome of this uncertainty.

As discussed in Note 14 to the financial  statements,  an error  resulting in an
overstatement of the previously reported 2001 net loss,  accumulated deficit and
accounts  payable-related  party was discovered by management during the current
year.  Accordingly,  the 2001 financial statements have been restated to correct
the error.


/s/ Stirtz Bernards Boyden Surdel & Larter, P.A.

Stirtz Bernards Boyden Surdel & Larter, P.A.
Edina, Minnesota
March 6, 2002, except for Note 14, as to which the date is November 25, 2002





<PAGE>



                                                                            F-1a




To the Board of Directors and Stockholders
Cramer, Inc.
Kansas City, Kansas

                          INDEPENDENT AUDITORS' REPORT


We have audited the accompanying balance sheet of Cramer, Inc. (a majority-owned
subsidiary of Rotherwood Ventures,  LLC) as of December 31, 2000 and the related
statements of operations,  stockholders' equity (deficit) and cash flows for the
year then  ended.  These  financial  statements  are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audit.

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

In our  opinion,  such  financial  statements  present  fairly,  in all material
respects, the financial position of the Company as of December 31, 2000, and the
results  of its  operations  and its  cash  flows  for the  year  then  ended in
conformity with accounting principles generally accepted in the United States of
America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 1 to the
financial statements, the Company's recurring losses from operations,  cash flow
difficulties,  negative working capital,  stockholders'  capital  deficiency and
lack of compliance with debt covenants raise substantial doubt about its ability
to continue as a going concern.  Management's plans concerning these matters are
also  described  in  Note  1.  The  financial  statements  do  not  include  any
adjustments that might result from the outcome of this uncertainty.



/s/ Deloitte & Touche LLP

Deloitte & Touche LLP
Kansas City, Missouri
May 4, 2001


<PAGE>

                                                                             F-2

                                  CRAMER, INC.

                                 BALANCE SHEETs

                    (Amounts In Thousands, Except Share Data)

<TABLE>
<CAPTION>

<S>                                                                       <C>                    <C>
                                                                                       December 31,
                                                                        --------------------------------------------
                                                                                2001                   2000
                                                                        ---------------------  ---------------------
                                ASSETS                                       (Restated)
                                ------

Current assets:
   Cash                                                                   $           282        $          -
   Accounts  receivable,  less  allowance for doubtful  accounts of
     $30 in 2001 and $38 in 2000                                                      563                  1,509
   Inventories,  less allowance for  obsolescence  and shrinkage of
     $110 in 2001 and $162 in 2000                                                    721                  1,558
   Prepaid expenses and other current assets                                          325                    336
                                                                        -----------------      -----------------

         Total current assets                                                       1,891                  3,403
                                                                        -----------------      -----------------




Property, plant and equipment                                                       6,215                  6,187
Less accumulated depreciation                                                      (5,585)                (5,369)
                                                                        -----------------      -----------------

         Total property, plant and equipment                                          630                    818
                                                                        -----------------      -----------------




Other assets:
   Intangible pension asset                                                             4                     56
                                                                        -----------------      -----------------




         Total assets                                                     $         2,525        $         4,277
                                                                          ===============        ===============

</TABLE>


<PAGE>


                       See Notes to Financial Statements.




(Balance Sheets, continued)


<TABLE>
<CAPTION>

<S>                                                                       <C>                    <C>
                                                                                       December 31,
                                                                        --------------------------------------------
                                                                                2001                   2000
                                                                        ---------------------  ---------------------
            LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                    (Restated)
            ----------------------------------------------

Current liabilities:
   Cash overdrafts                                                        $          -           $           282
   Notes payable                                                                    2,320                  2,302
   Accounts payable                                                                   485                  1,004
   Accounts payable - related party                                                    69                   -
   Accrued liabilities                                                                801                    664
                                                                        -----------------      -----------------

         Total current liabilities                                                  3,675                  4,252
                                                                        -----------------      -----------------

Noncurrent liabilities:
   Pension benefits payable                                                           326                    316
   Other                                                                              218                    185
                                                                        -----------------      -----------------

         Total noncurrent liabilities                                                 544                    501
                                                                        -----------------      -----------------

Commitments and contingencies (Note 7)

Stockholders' equity (deficit):
   Common stock, no par value, authorized, 6,000,000 shares; issued and
     outstanding 4,041,400 shares in 2001 and 4,051,400
     shares in 2000                                                                 3,820                  3,824
   Accumulated deficit                                                             (5,166)                (3,996)
                                                                        ------------------     -----------------
                                                                                   (1,346)                  (172)
   Accumulated other comprehensive income (loss)                                     (348)                  (304)
                                                                        -----------------      -----------------
         Total stockholders' equity (deficit)                                      (1,694)                  (476)
                                                                        ------------------     -----------------

         Total liabilities and stockholders' equity (deficit)             $         2,525        $         4,277
                                                                          ===============        ===============

</TABLE>


<PAGE>

                                                                             F-3

                                  CRAMER, INC.

                            STATEMENTS OF OPERATIONS

                  (Amounts In Thousands, Except Per Share Data)


<TABLE>
<CAPTION>

<S>                                                                       <C>                    <C>
                                                                                 Years Ended December 31,
                                                                        --------------------------------------------
                                                                                2001                   2000
                                                                        ---------------------  ---------------------
                                                                              (Restated)

Net sales                                                                 $        10,447        $        13,097
Cost of sales                                                                       8,133                  9,756
                                                                        -----------------      -----------------

         Gross profit                                                               2,314                  3,341
                                                                        -----------------      -----------------

Operating expenses:
   Selling                                                                          2,023                  2,405
   General and administration                                                       1,273                  1,222
   Impairment of intangibles                                                         -                       289
                                                                        -----------------      -----------------

         Total operating expenses                                                   3,296                  3,916
                                                                        -----------------      -----------------

         Loss from operations                                                        (982)                  (575)

Other expense:
   Interest expense                                                                  (174)                  (222)
   Other                                                                              (14)                  (220)
                                                                        -----------------      -----------------

         Loss before income taxes                                                  (1,170)                (1,017)

Income taxes                                                                         -                      -
                                                                        -----------------      --------------

         Net loss                                                         $        (1,170)       $        (1,017)
                                                                          ================       ===============


Net loss per common share - basic and diluted                             $          (.29)       $         (0.25)
                                                                          ================       ===============

Weighted  average  number of common  and common  equivalent  shares
   outstanding, basic and diluted                                                   4,041                  4,051
                                                                        =================      =================

Comprehensive loss:
   Net loss                                                               $        (1,170)       $        (1,017)
   Minimum pension liability adjustment, net of $-0- taxes                            (44)                  (107)
                                                                        -----------------      -----------------

         Total comprehensive loss                                         $        (1,214)       $        (1,124)
                                                                          ================       ===============

</TABLE>

                       See Notes to Financial Statements.


<PAGE>

                                                                             F-4


                                  CRAMER, INC.

                  STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

                             (Amounts in Thousands)


<TABLE>
<CAPTION>
<S>                                           <C>              <C>                 <C>              <C>               <C>
                                                                                                    Accumulated          Total
                                                                                                       Other          Stockholders'
                                                  Number           Common           Accumulated     Comprehensive        Equity
                                                of Shares          Stock              Deficit       Income (Loss)       (Deficit)

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


BALANCE, December 31, 1999                         4,051         $   3,824          $  (2,979)       $      (197)      $       648

   Net loss                                         -                 -                (1,017)              -               (1,017)

   Minimum pension liability adjustment             -                 -                  -                  (107)             (107)
                                              -------------    -------------       -------------    --------------    --------------

BALANCE, December 31, 2000                         4,051             3,824             (3,996)              (304)             (476)

   Net loss (Restated)                              -                 -                (1,170)              -               (1,170)

   Retirement of common stock                        (10)               (4)              -                  -                   (4)

   Minimum pension liability adjustment             -                 -                  -                  (44)               (44)
                                              -------------    -------------       -------------    --------------    --------------

BALANCE, December 31, 2001 (Restated)              4,041         $   3,820          $  (5,166)       $     (348)        $   (1,694)
                                              =============    =============       =============    ==============    ==============

</TABLE>

                       See Notes to Financial Statements.

<PAGE>


                                                                             F-5
                                  CRAMER, INC.

                            STATEMENTS OF CASH FLOWS

                           Increase (Decrease) in Cash

                             (Amounts in Thousands)


                                                        Years Ended December 31,
                                                     ---------------------------
                                                        2001             2000
                                                     ----------       ----------
                                                     (Restated)
Cash flows from operating activities:
   Net loss                                          $  (1,170)       $  (1,017)
   Adjustments to reconcile net loss to net
     cash flows from operating activities:
       Depreciation                                        218              267
       Impairment of intangibles                           -                289
   Changes in operating assets and liabilities:
     Accounts receivable                                   946             (246)
     Inventories                                           837             (203)
     Prepaid expenses and other current assets              11              (27)
     Intangible pension asset                               52               52
     Accounts payable and accrued liabilities             (313)             725
     Noncurrent pension benefits payable                   (34)             (92)
     Other noncurrent liabilities                           33              (43)
                                                     ----------       ----------
         Net cash flows from operating activities          580             (295)
                                                     ----------       ----------

Cash flows from investing activities:
   Purchases of property, plant and equipment              (30)            (250)
                                                     ----------       ----------

Cash flows from financing activities:
   Retirement of common stock                               (4)             -
   Net change in cash overdraft                           (282)              85
   Net change in notes payable                              18              460
                                                     ----------       ----------
         Net cash flows from financing activities         (268)             545
                                                     ----------       ----------

         Net change in cash                                282              -

Cash at beginning of year                                  -                -
                                                     ----------       ----------

Cash at end of year                                  $     282        $     -
                                                     ==========       ==========


Supplemental Disclosures of Cash Flow Information:

   Cash paid during the year for:
     Interest                                        $     174        $     222
                                                     ==========       ==========

     Income tax                                      $     -                -
                                                     ==========       ==========


<PAGE>




1.   Summary of Accounting Policies

     Organization

     Cramer,  Inc. ("Cramer" or "the Company") is a manufacturer of a variety of
     products  for office and  industrial  use.  The Company  sells its products
     throughout  the  United  States.   International  sales  are  limited.  The
     Company's   principal  customers  are  office  furniture  dealers  (seating
     products)  and  wholesale   catalog   distributors   (utility  and  seating
     products). Approximately 61% and 63% of net sales were seating products and
     approximately  39% and 37% of net sales were  utility  products in 2001 and
     2000,  respectively.  Cramer  is a 51.5%  owned  subsidiary  of  Rotherwood
     Ventures  LLC  ("Rotherwood"),  a  Minneapolis,   Minnesota  based  holding
     company.

     Going Concern

     The accompanying financial statements have been prepared on a going concern
     basis, which contemplates the realization of assets and the satisfaction of
     liabilities  in the ordinary  course of business.  The Company  experienced
     recurring  losses from  operations,  cash flow  difficulties  and  negative
     working  capital  during  2001  and 2000  and had a  stockholders'  capital
     deficiency of $1,694,000 at December 31, 2001. As a result,  the Company is
     not in compliance  with the financial net worth covenant in its bank credit
     agreement.  These  conditions raise  substantial  doubt about the Company's
     ability to continue as a going concern.

     Management   plans  include   obtaining   adequate  equity  financing  from
     Rotherwood,  paying down certain bank debt and obtaining  adequate  working
     capital financing. Management continues to evaluate the Company's products,
     methods and operations in an effort to improve Company performance, achieve
     positive  cash flow and restore  profitability.  There can be no  assurance
     these measures will be successful. Management is uncertain whether its bank
     credit facility can be renewed after it expires on April 27, 2002,  whether
     substitute  debt  financing can be obtained,  or whether  Rotherwood or any
     other party will make an equity investment in the Company. If adequate debt
     or equity  financing  cannot be  obtained,  the  Company may not be able to
     remain in business.

     Pervasiveness of Estimates

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

     Revenue Recognition

     The Company  recognizes  revenue when  products  are shipped to  customers.
     Provisions  for  discounts,  estimated  returns and  allowances,  and other
     adjustments  are  provided  for in the same  period the  related  sales are
     recorded.


<PAGE>


     Summary of Accounting Policies (Continued)

     Inventories

     Inventories  consist of raw materials,  work-in-process  and finished goods
     and are valued at the lower of cost or market.  Cost is  determined  by the
     first-in, first-out (FIFO) method.

     Property, Plant and Equipment

     Property, plant and equipment are carried at cost. Depreciation is computed
     using the straight-line method over the estimated useful lives. When assets
     are retired or  otherwise  disposed  of, the cost and  related  accumulated
     depreciation  are removed from the accounts and any resulting  gain or loss
     is recognized.  The cost of maintenance and repairs is expensed as incurred
     and significant renewals and betterments are capitalized.

     Impairment of Long-Lived Assets

     The Company reviews its long-lived assets for impairment whenever events or
     changes in circumstances  indicate that the carrying amount of an asset may
     not be  recoverable.  Recoverability  of  assets  to be  held  and  used is
     measured by a comparison of the carrying amount of an asset to undiscounted
     future net cash flows  expected to be  generated  by the  assets.  If these
     assets are  considered to be impaired,  the  impairment to be recognized is
     measured by the amount by which the carrying  amount of the assets  exceeds
     the fair value of the assets.

     Income Taxes

     Deferred income taxes are provided to reflect the tax effect of differences
     between  financial and income tax bases of certain assets and  liabilities.
     Items with differences  between financial and income tax bases are shown in
     Note 5.

     Warranties

     Depending on the product  model,  the Company  warranties  its products for
     periods up to 15 years.  The  Company's  reserve for  anticipated  warranty
     costs of $223,000 at December 31, 2001,  and $100,000 at December 31, 2000,
     is included in accrued liabilities. The warranty reserve is estimated based
     on durability testing,  engineering  studies,  and actual costs incurred in
     prior years.

     Advertising Costs

     The Company expenses advertising costs as incurred.  Advertising costs were
     $100,000 in 2001 and $127,000 in 2000.

     Comprehensive Income

     The Company  reports  comprehensive  income (loss) in accordance  with FASB
     Statement  No.  130,  "Reporting   Comprehensive  Income."  This  statement
     establishes  standards  for  reporting  comprehensive  income in  financial
     statements.   Material  components  of  accumulated  other

<PAGE>

     Summary of Accounting Policies (Continued)


     comprehensive  income (loss) must also be disclosed.  This  statement  only
     modifies disclosures,  including financial statements disclosures, and does
     not result in other  changes to the  results or  financial  position of the
     Company.

     Earnings (Loss) Per Share

     Basic and diluted  earnings  (loss) per share are  calculated in accordance
     with the  provisions of SFAS No. 128,  "Earnings Per Share." Basic earnings
     (loss)  per  share is  computed  by  dividing  income  available  to common
     shareholders  by the weighted  average number of common shares  outstanding
     for the reporting  period.  Diluted  earnings (loss) per share reflects the
     potential  dilution that could occur if  securities  or other  contracts to
     issue common stock were  exercised or converted  into common  stock.  There
     were no dilutive securities or contracts outstanding in 2001 or 2000.

     New Accounting Pronouncements

     In June 2001, the Financial Accounting Standards Board issued SFAS No. 141,
     "Business  Combinations,"  and SFAS No. 142. "Goodwill and Other Intangible
     Assets." Under these new standards, all acquisitions subsequent to June 30,
     2001,  must be accounted for under the purchase  method of accounting,  and
     purchased  goodwill is no longer  amortized  over its useful life.  Rather,
     goodwill  will be subject to a periodic  impairment  test based on its fair
     value.  SFAS 142 is effective for fiscal years beginning after December 15,
     2001, although earlier adoption is permitted. We will adopt these standards
     beginning in 2002.

     In October 2001, the Financial  Accounting  Standards Board issued SFAS No.
     144, "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS
     144 supersedes SFAS 121. SFAS 144 primarily  addresses  significant  issues
     relating to the implementation of SFAS 121 and develops a single accounting
     model for long-lived assets to be disposed of, whether primarily held, used
     or newly acquired.  The provisions of SFAS 144 will be effective for fiscal
     years  beginning  after  December  15,  2001.  We will adopt this  standard
     beginning in 2002.

     The Company  believes the adoption of the above standards will result in no
     transitional  adjustment  or have  any  material  impact  on its  financial
     statements.

     Concentrations

          Credit Risk

          Financial   instruments  that  potentially   subject  the  Company  to
          concentrations  of credit risk consist  principally  of trade accounts
          receivable.  The Company has many customers  across the United States.
          The Company performs ongoing  evaluations of its customers'  financial
          condition and generally requires no collateral from its customers. The
          risk is limited  due to the large  number of entities  comprising  the
          Company's  customer  base.  The  Company  maintains  its  cash in bank
          deposit accounts which, at times, may exceed federally insured limits.
          The  Company  has not  experienced  any losses in such  accounts.  The
          Company  believes it is not exposed to any significant  credit risk on
          cash. 1.

<PAGE>

     Summary of Accounting Policies (Continued)

     Concentrations (Continued)

          Suppliers

          Certain components of the Company's products are sourced from a single
          vendor.  Any disruption in these supply  arrangements  could result in
          temporary  shipment delays or increased  costs.  However,  the Company
          believes it has the ability to substitute  suppliers for any component
          within a three-month period of time.

          Customers

          No single  customer  accounted  for more than 8% of the  Company's net
          sales in 2001.

     Shipping and Handling Costs

     Shipping and handling costs are included in cost of sales.


2.   Inventories

     Inventories consisted of the following (in thousands):

                                                         2001           2000
                                                      -----------    -----------

         Raw materials                                $    482       $  1,067
         Work-in-process                                   126            490
         Finished goods                                    223            163
         Reserve for obsolescence and shrinkage           (110)          (162)
                                                      -----------    -----------

                                                      $    721       $  1,558
                                                      ===========    ===========


3.   Property, Plant and Equipment

     Property, plant and equipment consisted of the following (in thousands):

                                                                    Estimated
                                      2001           2000          Useful Lives
                                   ----------     ----------     ---------------

        Land                       $      29      $      29             -
        Buildings                        917            908          5  - 40
        Machinery and equipment        3,861          3,848          3  - 10
        Furniture and equipment        1,408          1,402          5  - 10
                                   ----------     ----------
                                   $   6,215      $   6,187
                                   ==========     ==========


<PAGE>


4.   Notes Payable

     The Company and Pacer Corporation (a subsidiary of Rotherwood)  participate
     in a combined  credit  facility  with  Firstar  Bank.  The credit  facility
     provides the Company and Pacer with access to a revolving line-of-credit of
     $2,000,000  with  interest  payable  monthly at the bank's prime rate and a
     $320,000 line-of-credit with interest payable monthly at the prime plus 2%.
     The Company  accounted for 100% of the $2,320,000 in borrowings at December
     31, 2001.

     The combined credit  facility,  which matures on April 27, 2002, is secured
     by the general intangibles, inventory, accounts receivable and equipment of
     the Company and Pacer.  Rotherwood  has provided the bank with a $2,000,000
     letter of credit as additional collateral for the loan.

     The Company is not in compliance  with the net worth  covenants in the loan
     agreements governing the credit facility.  Accordingly, there is a risk the
     bank could curtail the Company's right to borrow additional funds under the
     credit  facility,  require  the  Company  to prepay all or a portion of the
     principal  balance under the credit facility prior to the maturity date, or
     fail to renew the credit  facility when it matures April 27, 2002. Any such
     action  would  make it much  more  difficult  for the  Company  to  support
     operations and achieve  positive cash flow and profitable  operations,  and
     could require the Company to curtail operations.


5.   Income Taxes

     Deferred income taxes reflect the net tax effects of temporary  differences
     between  the  carrying  amounts of assets  and  liabilities  for  financial
     reporting   purposes  and  the  amounts  used  for  income  tax   purposes.
     Significant components of the Company's deferred tax assets and liabilities
     as of December 31, 2001 and 2000, are as follows (in thousands):

                                                   2001               2000
                                              --------------     ---------------
        Deferred tax assets:
          Net operating loss carryforwards    $      4,377        $      4,011
          Tax credit carryforwards                    -                    317
          Pension costs                                126                 102
          Product liability accrual                     85                  72
          Accrued compensation and vacations             7                  22
          Warranty accrual                              87                  39
          Inventories                                   51                  86
          Other - net                                   29                  37
                                              --------------     ---------------

              Total deferred tax assets              4,762               4,686
              Deferred tax liabilities                -                    (16)
                                              --------------     ---------------

              Net deferred tax asset                 4,762               4,670
              Valuation allowance                   (4,762)             (4,670)
                                              --------------     ---------------

                                              $       -           $       -
                                              ==============     ===============


<PAGE>


     Income Taxes (Continued)

     A  reconciliation  of the income tax  provision  (benefit)  to the  amounts
     computed at the federal statutory rate is as follows (in thousands):

                                                        2001            2000
                                                    -------------   ------------

        Tax provision (benefit) at statutory rate   $     (398)     $     (333)
        State income taxes, net of federal taxes           (60)            (45)
        Changes in valuation  reserve  related to
          utilization or generation of tax credits
          and net operating loss carryforwards             466             381
        Other                                               (8)             (3)
                                                    ------------    ------------

                                                    $      -        $      -
                                                    ===========     ============

     At  December  31,  2001,  the  Company  has  available  $11,223,000  of net
     operating  loss  carryforwards  to reduce future  income taxes,  subject to
     applicable limitations.  The carryforwards expire beginning in 2006 through
     2021.


6.   Benefit Plans

     Defined Benefit Plan

     The  Company  has a  defined  benefit  pension  plan  covering  all  of its
     bargaining  unit  employees  working as of September  30,  1988.  Effective
     September 30, 1988, the plan was amended to freeze future benefit accruals.
     As a result of freezing the benefits,  no further  benefits  accrue to plan
     participants.  The amount of pension a participant  will receive was frozen
     at $9.00 multiplied by the number of years of service from the later of the
     date of hire or January 1, 1942,  through  September  30,  1988.  Effective
     September  30, 1988,  new  employees  have not accrued  benefits  under the
     defined  benefit plan.  The  Company's  funding of the plan is equal to, or
     exceeds, the minimum contribution required by ERISA and totaled $65,000 and
     $114,000 in 2001 and 2000, respectively.

     Net pension costs included the following components (in thousands):

                                                            2001         2000
                                                         -----------  ----------

        Service cost - benefits earned during the period $     -      $    -
        Interest cost on projected benefit obligation            52         58
        Expected return on plan assets                          (38)       (43)
        Net amortization and deferral                            69         59
                                                         ----------   ----------

            Total pension costs                          $       83   $     74
                                                         ==========   ==========



<PAGE>


     Benefit Plans (Continued)

     Defined Benefit Plan (Continued)

     Net  regular  periodic  pension  cost was  calculated  using the  following
     assumptions:

                                                      2001           2000
                                                  ------------   ---------------

            Weighted Average Discount Rate            7.0%           7.5%
            Expected Long-Term Rate of Return         8.0%           8.0%

     The plan's  funded  status as of December 31, 2001 and 2000,  is summarized
     below (in thousands):

<TABLE>
<CAPTION>
<S>                                                                     <C>                <C>
                                                                              2001              2000
                                                                        ---------------    ---------------

            Actuarial present value of projected benefit obligation     $       (705)      $       (781)
            Plan assets at fair value                                            379                465
            Remaining unrecognized net transition obligation                       4                 56
            Unrecognized net loss                                                348                304
            Adjustment required to recognize minimum liability                  (352)              (360)
                                                                        ---------------    ---------------

            Net pension liability recognized                            $       (326)      $       (316)
                                                                        ===============    ===============

</TABLE>

     An intangible asset of $4,000 equal to the unrecognized  prior service cost
     and  transition  obligation  has been  included in the balance  sheet.  The
     remaining   additional   minimum  liability  of  $348,000  related  to  the
     unrecognized  net loss has been  recorded  as a decrease  in  stockholders'
     equity at December  31, 2001.  The change in this amount of $44,000  during
     2001 has been included as a component of other comprehensive income.

     The fair  value of plan  assets  changed in 2001 and 2000,  as follows  (in
     thousands):


<TABLE>
<CAPTION>
<S>                                                                     <C>                <C>
                                                                              2001              2000
                                                                        ---------------    ---------------

            Fair value of plan assets, beginning of year                $        465       $       503
            Contributions                                                         65               114
            Benefit payments                                                     (88)             (100)
            Investment return, net of investment expenses                        (63)              (52)
                                                                        ---------------    ---------------

                  Fair value of plan assets, end of year                $        379       $       465
                                                                        ===============    ===============
</TABLE>


     The  projected  benefit  obligation  in  2001  and  2000,  as  follows  (in
     thousands):

<TABLE>
<CAPTION>
<S>                                                                     <C>                <C>
                                                                              2001             2000
                                                                       ---------------    ---------------

            Projected benefit obligation, beginning of year            $        (781)     $      (805)
            Interest costs                                                       (52)             (58)
            Benefits paid                                                         88              100
            Actuarial gains and (losses)                                          40              (18)
                                                                       ---------------    ---------------

                  Projected benefit obligation, end of year            $        (705)     $      (781)
                                                                       ===============    ===============
</TABLE>


<PAGE>


     Benefit Plans (Continued)

     Defined Benefit Plan (Continued)

     Plan assets are held by trust funds devoted to servicing  pension  benefits
     and are  invested in a  diversified  portfolio  of fixed  income and equity
     securities.

     In providing the Defined  Benefit Plan  analysis,  the Company  relied upon
     information provided by an independent actuary.

     Defined Contribution Plan

     The Company  sponsors a 401(k) plan covering  substantially  all employees.
     Participants  may  contribute  from 1% to 15% of  compensation,  subject to
     annual limitations. In 1999, the Company instituted a matching contribution
     equal to 25% of a participant's  contribution that is less than or equal to
     6% of gross  salary.  In  addition,  the plan  provides  for  discretionary
     contributions  as  determined  by the  Board of  Directors.  Total  Company
     contributions  consisted solely of matching  contributions in 2001 and 2000
     and were $12,000 and $19,000, respectively.


7.   Commitments And Contingencies

     The Company is a defendant in lawsuits related to product  liability claims
     that are  considered  a routine  aspect of its  business.  The  claims  are
     covered by insurance and are being defended by the Company's  counsel or by
     counsel  assigned  by  the  Company's  insurance  carriers.  The  Company's
     liability insurance coverage obligates the Company to pay the first $50,000
     of settlement or award and related  defense costs.  Any settlement or award
     and  defense  cost in  excess  of the  $50,000  deductible  is  covered  by
     insurance. Settlement and defense costs paid by the Company typically occur
     within two years after the date a claim is filed.

     At December 31, 2001,  unless specific  information  pertaining to the case
     indicated otherwise, a specific reserve for each case was accrued for based
     on historical case cost not exceeding the  deductible,  less costs incurred
     to date.  The  Company  recorded a specific  case  reserve of  $105,000  at
     December 31, 2001. In addition to reserves for specific cases,  the Company
     estimates  its  exposure  for  unasserted  claims  and  records  additional
     reserves using claims history as well as recent trend insights. The Company
     recorded a reserve for unasserted  claims of $113,000 at December 31, 2001.
     Although the Company's  claims history has stabilized in recent years,  the
     Company cannot be certain that future claims  experience will be consistent
     with historical claims experience.  An increase in the frequency or average
     cost of future  claims  could  increase the  Company's  exposure to product
     liability expense.  However, the maximum total legal defense and settlement
     costs for each claim is limited to the $50,000 deductible.  The Company has
     recorded  an  aggregate  accrual for product  liability  claims,  including
     reserves for specific claims and unasserted claims, of $218,000 at December
     31,  2001,  and  $185,000 at December  31,  2000.  Management  believes the
     outcome  of these  claims  will not have a material  adverse  effect on the
     Company's financial position or results of operations.

     The Company was assessed OSHA penalties aggregating $117,500 as a result of
     an  inspection  conducted in 2000. In February  2002,  the Company and OSHA
     have agreed to settle the claims for $23,000 and settlement  documents have
     been  submitted to the Company by OSHA. The Company has recorded an accrual
     for OSHA penalties of $23,000 at December 31, 2001, and $35,000 at December
     31, 2000.


8.   Related Party Transactions

     Rotherwood,  the Company's majority owner,  provides management services to
     the Company.  The cost to the Company for these services was  approximately
     $91,500 in 2001 and $28,000 in 2000.  In addition,  Cramer  incurred a 2001
     expense of $8,000 for a loan guarantee fee by Rotherwood  (see Note 14). At
     December 31, 2001, Cramer owed Rotherwood  $68,900 for these expenses along
     with other expenses incurred by Rotherwood for the benefit of Cramer.


9.   Impairment of Intangibles

     In 2000,  the Company  wrote-off  $289,000 of goodwill,  customer lists and
     patents   related  to  a  proprietary   keyboard   product  line  that  was
     discontinued.


10.  Financial Instruments

     At December 31, 2001 and 2000,  the carrying  value of the Company's  cash,
     accounts receivable,  and accounts payable approximate fair value. Based on
     borrowing  rates  currently  available  to the  Company for bank loans with
     similar terms and  collateral,  the fair value of the Company's  short-term
     notes payable approximates their carrying value.


11.  Stock Option Plan

     In 1989,  the Company  implemented  a stock option plan (the "Plan")  which
     provided for the grant of incentive awards to directors, officers and other
     key employees.  The Plan expired in 2000.  There were no outstanding  stock
     option grants or shares exercised under this plan in 2000.


12.  Collective Bargaining Agreement

     The factory workers are covered by a collective  bargaining  agreement with
     the United  Steelworkers of America that expires on September 30, 2003. The
     economic  portion  of  the  agreement  expired  on  October  1,  2001,  and
     subsequently has been renewed on a month-to-month  basis. Any work stoppage
     could  impact  the  Company's  ability  to  manufacture  product,   on-time
     delivery,  and product quality, which in turn could have a material adverse
     effect on the Company's business and financial condition.

13.  Significant Items Affecting Fourth Quarter

     In the fourth  quarter of 2001, the Company  recorded  charges for warranty
     reserves and other  accruals of  approximately  $164,000,  and  wrote-off a
     grant  receivable of  approximately  $82,000  related to  expenditures  for
     consulting  services that were previously expected to be reimbursed through
     a grant.  These  adjustments  increased the fourth quarter net loss by $.06
     per share.

14.  Restatement of 2001 Financial Statements

     The 2001  financial  statements  have been restated to reflect a Rotherwood
     loan  guarantee  fee of $8,000 for the fourth  quarter of 2001  rather than
     $40,000 as previously  reported.  Rotherwood  had agreed to accept  800,000
     shares of common  stock per quarter as payment of the  guarantee  fee.  The
     Company  recorded the  transaction  using the  exchange  value agreed to by
     Rotherwood of $.05 per share,  resulting in an expense of $40,000  (800,000
     shares X $.05/share = $40,000). In the current year, the Company determined
     the  transaction  should have been recorded  using a fair value of $.01 per
     share,  resulting  in an expense of $8,000  (800,000  shares X $.01/share =
     $8,000).  The  effect  of the  restatement  was to  reduce  the  previously
     reported 2001 net loss,  accumulated  deficit and accounts  payable-related
     party by $32,000.  The  restatement  also reduced the basic and diluted net
     loss per common share from $.30 to $.29.



ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

The Company previously reported a change in accountants.


                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT -

                                    DIRECTORS

The  Company's  Board of Directors is currently  comprised of two members  whose
terms expire at the 2002 annual meeting of shareholders.

Information about each director is included below.


--------------------------------------------------------------------------------
James R. Zicarelli                                      Director since 1992
--------------------------------------------------------------------------------

James R. Zicarelli, 50, is President of Rotherwood Ventures, LLC ("Rotherwood"),
a Minnesota holding company and majority  shareholder of your Company. He owns a
6% interest in Rotherwood. Mr. Zicarelli serves as CEO of Sagebrush Corporation,
a  library   services  and  publishing   company   affiliated  with  Rotherwood.
Previously,  he  served as CEO of  Cramer,  Inc.  (1995 to  2001);  CEO of Pacer
Corporation (1992 to 2001), an affiliate of Rotherwood;  CFO of GV Medical, Inc.
(1983 to 1990);  and Division  Controller of National  Computer Systems (1974 to
1983).  He holds a B.A. from Carleton  College and an MBA from The University of
St. Thomas.



--------------------------------------------------------------------------------
David E. Crandall                                       Director since 1992
--------------------------------------------------------------------------------

David E. Crandall,  59, is Chairman and CEO of PPA Industries,  Dallas, Texas, a
company he founded in 1980 and that is engaged in the  manufacture of electronic
enclosures,  pre-fabricated wall systems and machinery packages.(1)  Previously,
he was Senior Vice  President of  Manufacturing  Operations  and board member of
Sunshine Mining Company (1977 to 1980);  Senior Vice President,  Finance for the
Great  Western  Sugar  Company  (1974  to  1977);  and  various  positions  with
Electronic Data Systems and Citibank on Wall Street (1971 to 1974). Mr. Crandall
served  3-1/2 years in the U.S.  Army,  during  which time he  computerized  the
Admissions  System at West  Point  Academy.  He served ten years on the Board of
Trustees at St. Mark's School of Texas.  He holds a B.A. from The  University of
Kansas  and  an  MBA  from  The   University   of  Missouri   at  Kansas   City.
--------------------------------------------------------------------------------

(1)PPA Industries filed for reorganization under the Bankruptcy Code in February
     2000. The case was subsequently dismissed.

There is no family relationship  between any of the directors or officers of the
Company.

The Board of Directors met ten times in 2001. No director attended less than 75%
of those meetings.


The Board formally appointed an Audit Committee and a Compensation  Committee in
2001.  Prior to 2001, the Board of Directors  served as the Audit  Committee and
Compensation Committee. Because there are only two directors on the Board at the
present time, the Audit Committee and Compensation  Committee consist of the two
current directors.

Audit Committee

We have  elected  to apply Rule  4200(a)(15)  of the  NASDAQ  listing  standards
("NASDAQ  Rule  4200(a)(15)")  to  determine  whether  the  members of the Audit
Committee are "independent."  Management  believes Mr. Crandall is "independent"
as defined by NASDAQ Rule  4200(a)(15).  In light of Mr.  Zicarelli's  status as
President  of  Rotherwood,   his  6%  ownership  interest  in  Rotherwood,   his
affiliation  with other  Rotherwood  entities,  and his prior  service as CEO of
Cramer,  Mr.  Zicarelli  is not  deemed  "independent"  as defined by that Rule.
Nevertheless, the Board has determined that Mr. Zicarelli's service on the Audit
Committee is in the best  interest of our  shareholders  in light of the current
size of the Board,  the limited size and  resources of the Company,  the Board's
determination to minimize administrative  expenses, the difficulty of recruiting
additional  independent  directors to serve on the Board and the value which Mr.
Zicarelli's  financial  expertise and judgment add to the Audit  Committee.  See
Item 12- "Certain Relationships and Related Transactions").

The Audit Committee assists the Company in fulfilling its responsibility for our
accounting and financial  reporting  practices and our annual audited  financial
statements. As part of these duties, the Audit Committee:

     o    engages the independent accounting firm to be retained each year

     o    approves the performance of audit and permitted  non-audit services by
          the independent accountants

     o    reviews the activities of our internal accounting staff

     o    reviews the scope and  results of the  quarterly  unaudited  financial
          statements  and the audit of our annual  financial  statements and any
          auditor  recommendations  regarding the quarterly and annual financial
          statements and our accounting practices

     o    evaluates the independence of the accountants from the Company and its
          management



<PAGE>


Compensation Committee

The Compensation  Committee  establishes the compensation for executive officers
and approves and administers the Company's executive compensation programs.

Committee Meetings

The Audit Committee and Compensation  Committee did not meet separately from the
Board in 2001.

                                    OFFICERS

Nicholas  Christianson,  31, was appointed  Interim Chief  Financial  Officer on
April 1, 2002, and was appointed  Acting  President and Chief Executive  Officer
and Acting  Secretary on September 3, 2002.  Gregory  Coward served as President
and Chief  Executive  Officer of Cramer from January 24, 2001 until September 3,
2002. Mr. Coward was an officer of Rotherwood during his tenure as the Company's
President and Chief Executive Officer.  He was compensated by Rotherwood and did
not receive any compensation  from the Company for serving as President and CEO.
Mr.  Coward was  retained by Cramer's  Board of  Directors to conduct a thorough
review of the  Company's  operations  and  implement a turnaround  plan with the
intention  of  achieving  positive  cash  flow  and  returning  the  Company  to
profitability. Mr. Coward's assignment concluded upon completing that review and
putting in place the major components of the turnaround  plan. Mr.  Christianson
is employed by an affiliate of Rotherwood and performs his duties at Cramer on a
part-time basis.  Rotherwood intends to name a permanent CEO of the Company upon
completion of the Going Private  Transaction.  Mr. Christianson served as CFO of
two  application  service  providers,  MetaFarms,  Inc.  and  Scout  Information
Services,  from 1997 to 2001. He participated in the development and spin-off of
several  Internet based start-up  ventures at Scout and helped  MetaFarms launch
its operations.  Prior to his position at Scout, Mr. Christianson was an auditor
at PriceWaterhouse Coopers. Mr. Christianson is a licensed CPA.

                COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Based on its review of Forms 3 and 4 and  amendments  thereto  furnished  to the
Company under Rule 16a-3(d) of the SEC during the fiscal year ended December 31,
2001, and any Form 5's and amendments thereto furnished with respect to the 2001
fiscal  year,  we are not aware of any person  who,  at any time during the 2001
fiscal  year,  was a  director,  officer  or  beneficial  owner of more than ten
percent of the Company's  common stock and who failed to file on a timely basis,
as  disclosed  in those  Forms,  the reports  required  by Section  16(a) of the
Securities  Exchange Act of 1934,  with the  exception of the Form 3 for Gregory
Coward,  which was filed late on January 16, 2002 and which  confirmed  that Mr.
Coward does not own any shares of Cramer stock.

ITEM 10. EXECUTIVE COMPENSATION -

Description of compensation arrangements

Gregory   Coward  was   compensated  by  Rotherwood  and  did  not  receive  any
compensation  from the  Company  for serving as  President  and Chief  Executive
Officer. Mr. Coward's  compensation from Rotherwood was not specifically related
to  Cramer's  performance.  Rotherwood  has  charged  Cramer  a  monthly  fee as
compensation for making Mr. Coward's  services  available to the Company,  which
will be payable  through  December  31,  2002.  Rotherwood  charged  fees to the
Company for Mr.  Coward's  services and related  travel  expenses of $103,900 in
2001. Cramer paid $48,000 of these fees during 2001 and recorded the balance due
of  $55,900  as  an  accrued  liability  in  the  December  31,  2001  financial
statements.

Mr.  Christianson is compensated by a Rotherwood  affiliate and does not receive
any compensation from the Company for serving as Interim Chief Financial Officer
or Acting  President  and Chief  Executive  Officer  or  Acting  Secretary.  Mr.
Christianson's  compensation  from the  Rotherwood  affiliate  is not related to
Cramer's performance. Rotherwood charges Cramer a fee as compensation for making
Mr. Christianson's  services available to the Company,  based upon the amount of
time spent by him on the Company's business.  Rotherwood has charged fees to the
Company for Mr. Christianson's  services in the amount of $64,800 for the period
from April 1-December 31, 2002.


James R. Zicarelli  served as CEO of Cramer until the  appointment of Mr. Coward
on January 24,  2001.  Mr.  Zicarelli is  President  of  Rotherwood  and did not
receive any  compensation  from the Company for serving as CEO. Mr.  Zicarelli's
compensation   from  Rotherwood  was  not   specifically   related  to  Cramer's
performance  or the  time  spent by him in  Cramer  management.  Cramer  was not
charged by Rotherwood for Mr. Zicarelli's services during 2001.

See Item 11- "Certain  Relationships and Related Transactions" below for further
discussion of Cramer's transactions with Rotherwood.

Summary Compensation Table

The following  table provides  information  regarding the  compensation  paid in
2001,  2000 and 1999 to the  persons  who served as  executive  officers  of the
Company until their termination in 2001 and whose annual  compensation  exceeded
$100,000 in any of those years.

       ------------------------ ----------- -----------------------------------
          Name and Principal                       Annual Compensation
              Position              Year
              (a) (b)
       ------------------------ ----------- --------------- -------------------
                                              Salary ($)        Bonus ($)
                                                  (c)              (d)
       ------------------------ ----------- --------------- -------------------
       Robert Kovach(1)            2001        $ 23,138             $0
       President and COO
       ------------------------ ----------- --------------- -------------------
                                   2000        $128,000             $0
       ------------------------ ----------- --------------- -------------------
                                   1999        $124,676          $12,000
       ------------------------ ----------- --------------- -------------------
       Jeffrey Myer(2)             2001        $ 47,855             $0
       Vice President, Sales
       and Marketing
       ------------------------ ----------- --------------- -------------------
                                   2000        $111,592          $10,000
       ------------------------ ----------- --------------- -------------------
                                   1999        $107,945          $ 5,000
       ------------------------ ----------- --------------- -------------------

(1) Mr. Kovach was terminated in January 2001

(2) Mr. Myer was terminated in March 2001


How are directors compensated?

The Company's policy is to pay each director who is not an employee of Cramer or
Rotherwood  $1,000 for each Board meeting attended and to reimburse his expenses
related to the  meeting.  However,  Mr  Crandall  declined to accept any fees or
reimbursed expenses for Board meetings held in 2001.


ITEM 11.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT -


Except as set forth  below,  we know of no  single  person or group  that is the
beneficial owner of more than 5% of the Company's outstanding stock:

                                           Amount and Nature of       Percent of
Name and Address of Beneficial Owner     Beneficial Ownership (1)      Class (6)
-------------------------------------    ------------------------    -----------
Rotherwood Ventures LLC                       2,083,212(2)(3)            51.6%
301 Carlson Parkway
Minnetonka, Minnesota 55305

James R. Zicarelli(2)(3)(4)                   2,083,212(2)(3)(5)         51.6%
301 Carlson Parkway
Minnetonka, Minnesota  55305


(1)  Based solely on disclosures made in Schedule 13D filed with the SEC.
(2)  Mr.  Zicarelli  and the  Chairman  of  Rotherwood  have  shared  voting and
     investment power over the shares.  Mr. Zicarelli may also be deemed to have
     an  indirect  beneficial  ownership  of such shares to the extent of his 6%
     ownership interest in Rotherwood.
(3)  The  Company  is  obligated  to  pay  Rotherwood  a  fee  in  exchange  for
     Rotherwood's  provision of a $2,000,000 letter of credit/securities  pledge
     in support of the Company's  $2,000,000  bank loan.  The fee is equal to 2%
     per quarter of the letter of credit/pledge  amount and is payable in shares
     of  common  stock  at the rate of  $0.05  per  share  (800,000  shares  per
     quarter).  After the  issuance of common stock to  Rotherwood  for guaranty
     fees earned by Rotherwood in the fourth quarter of 2001 and the first three
     quarters of 2002,  Rotherwood will own 5,283,212 shares of common stock, or
     73.0% of the total outstanding shares. See additional  discussion regarding
     the  accounting  treatment of the guarantee  fees in Item 6-  "Management's
     Discussion and Analysis of Financial Condition and Results of Operations"
(4)  Except as described in footnote 3 above, no Rotherwood  Entity has acquired
     any shares of common stock of the Company during the last two years.
(5)  Includes the 2,083,212  shares held by Rotherwood.  (6) Percentage based on
     common and common equivalent shares.


This table shows as of December  31, 2001 the number of our shares  beneficially
owned by the  directors  and  officers of the Company and by the  directors  and
officers  as  a  group.  All  information  regarding  beneficial  ownership  was
furnished by the persons listed below.


<PAGE>



--------------------------------  --------------------------- ------------------
                                      Amount and Nature of     Percent of Shares
     Name of Beneficial Owner         Beneficial Ownership      Outstanding (4)
--------------------------------  --------------------------- ------------------
     James R. Zicarelli(1)                   2,083,212(2)            51.6%
--------------------------------  --------------------------- ------------------
     David E. Crandall                       125,341(3)               3.1%
--------------------------------  --------------------------- ------------------
     Nicholas Christianson                        0                     0%
--------------------------------  --------------------------- ------------------
     All officers and directors
     as a group (4 persons)                   2,208,553              54.7%
--------------------------------  --------------------------- ------------------

(1)  Includes  the  2,083,212  shares  held  by  Rotherwood.  Mr.  Zicarelli  is
     President and a 6% owner of Rotherwood.  Pursuant to Rule 13d-3 of the SEC,
     the 2,083,212 shares held by Rotherwood and the additional  shares issuable
     to  Rotherwood  as  described  in footnote 3 of the  previous  table may be
     attributed to Mr.  Zicarelli  because of his shared  voting and  investment
     power over those shares and his 6% ownership interest in Rotherwood.

(2)  Mr.  Zicarelli  shares  voting and  investment  power over the shares  with
     Rotherwood's Chairman. (3) Sole voting and investment power. (4) Percentage
     based on common and common equivalent shares


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS -

By virtue of its 51.6%  ownership  of the  Company's  common  stock,  Rotherwood
controls the Company and may be deemed a "parent" of the Company.

Rotherwood  is  a  majority-owned  subsidiary  of  Rotherwood  Investments,  LLC
("Rotherwood Investments").  By virtue of its control of Rotherwood,  Rotherwood
Investments  also  controls  the  Company  and may be deemed a  "parent"  of the
Company.

James R. Zicarelli,  Chairman of Cramer's Board of Directors, served as Cramer's
CEO until Mr.  Coward  was  appointed  to that  position  in January  2001.  Mr.
Zicarelli  is  President  of  Rotherwood  and owns a 6%  ownership  interest  in
Rotherwood.  Mr.  Zicarelli would be entitled to a portion of any dividends paid
by the Company and a portion of the proceeds from any sale or liquidation of the
Company after the Going Private  Transaction is consummated to the extent of his
6% interest in Rotherwood.

Gregory   Coward  was   compensated  by  Rotherwood  and  did  not  receive  any
compensation  from the  Company  for serving as  President  and Chief  Executive
Officer.  Mr. Christianson is compensated by an affiliate of Rotherwood and does
not receive  any  compensation  from the  Company  for serving as Interim  Chief
Financial  Officer,  Acting  President  and Chief  Executive  Officer  or Acting
Secretary  (See  "Executive   Compensation"   for  more  information   regarding
compensation arrangements for Mr. Coward and Mr. Christianson).

Cramer  participates with Pacer  Corporation,  an affiliate of Rotherwood,  as a
co-borrower  in a combined  $2,320,000  credit  facility with US Bank  (formerly
Firststar Bank). The credit facility consists of a loan in the maximum amount of
$2,000,000 with interest payable monthly at the bank's prime rate and a $320,000
revolving  line of credit with  interest  payable  monthly at prime plus 2%. The
Company  accounts for 100% of the current  borrowings under the credit facility.
The credit facility has been fully drawn by the Company, and no additional funds
are available for borrowing  under the credit  facility.  The credit facility is
secured by the general intangibles, inventory, accounts receivable and equipment
of the Company and Pacer.  The  $2,000,000  loan is also  secured by a pledge of
$2,000,000 in securities by  Rotherwood.  Rotherwood is required under the terms
of its  collateral  pledge  agreement to maintain the value of the collateral at
$2,000,000  and to  pledge  additional  securities  if  required  to  meet  that
obligation. A default by the Company under the loan agreement would constitute a
default by Rotherwood under its collateral pledge agreement. The pledge replaces
a $2,000,000  letter of credit posted by Rotherwood  which formerly  secured the
$2,000,000 loan. Among the covenants in the loan agreement is a requirement that
Pacer and Cramer maintain a $500,000 minimum net worth. Cramer and Pacer are not
in compliance with this net worth  covenant,  and are thus in default under both
loans.  The $320,000 line of credit has been classified as  non-performing.  The
credit facility expired on January 27, 2002 but has been temporarily extended at
periodic  intervals,  with the latest  extension  expiring  on February 3, 2003.
Although  the loans  have been  extended,  the bank has not given the  Company a
standstill  agreement and could call and  accelerate  the loans at any time. The
Company does not have sufficient assets to pay off the loans, so any such action
by the bank could force the Company to declare bankruptcy,  cease operations and
liquidate.  If the bank were to call the $2,000,000  loan and foreclose upon the
collateral posted by Rotherwood, Rotherwood could succeed to the bank's position
as the  lender,  call that loan and  proceed  against  the  Company's  assets in
satisfaction  of the loan. The Company does not believe the lender will call the
$2,000,000  loan so long  as  Rotherwood  maintains  the  $2,000,000  securities
pledge.  The bank has  requested  that the Company  either  reduce the principal
balance of the $320,000 revolving credit line or provide  additional  collateral
in the form of a guaranty or additional security by February 3, 2003.

In exchange for Rotherwood's  financial  accommodations to the Company,  without
which the Company could not have obtained the $2,000,000 loan and the $2,000,000
loan would  probably  be called,  the  Company  has agreed to pay  Rotherwood  a
quarterly fee of 2% of the letter of  credit/pledge  amount to be paid in shares
of common  stock.  The Company is seeking to amend its  Articles to increase its
authorized  common  stock to enable the Company to pay this fee in common  stock
beyond the first  quarter  of 2002.  The  Company  also  seeks to  increase  its
authorized common stock for the purpose of issuing common stock to Rotherwood in
the proposed $900,000 investment transaction (see Item III - "Issuance of Common
Stock to Rotherwood for Cash and Subsequent `Going Private' Transaction"). It is
expected  that  approximately  $775,000  from this  investment  would be used to
reduce the principal balance of the loan(s), with the remaining $125,000 used to
credit  Rotherwood for a $125,000  advance used by the Company to pay relocation
expenses.

Rotherwood  has advised the Company that it does not wish to keep the $2,000,000
securities  pledge  in  place  indefinitely.  Rotherwood  is  not  contractually
obligated to the Company to maintain the securities  pledge for any given period
of time.

The loan  agreement  provides  that the bank may  declare a default and call and
accelerate  the loans if there is a  material  adverse  change in the  business,
properties,  financial condition or affairs of Cramer, Pacer or Rotherwood.  The
bank also has the right to call the loans if the bank in good faith deems itself
"insecure."   In  light  of  these   provisions  in  the  loan   agreement  (the
"MAC/Insecurity Clause") and the Company's financial condition,  declining sales
and history of losses,  the bank could call the loans at any time even if Cramer
is  current  on its debt  service  obligations  and  Cramer  and Pacer  have not
violated any other provisions of the loan documents.

If Rotherwood makes the proposed equity  investment in the Company,  the Company
would become a 90% subsidiary of Rotherwood,  permitting  Rotherwood to effect a
short-form  merger of the Company  into  Rotherwood  without the approval of the
Public  Shareholders.  The Public  Shareholders would receive $0.05 per share in
cash in the Merger,  subject to proper exercise of their appraisal  rights under
Kansas law. Following  completion of the Merger,  Rotherwood intends to take the
Company  "private" by  terminating  its status as a reporting  company under the
Exchange Act (See Item III below, Item 6, "Management's  Discussion and Analysis
of Financial Condition and Results of Operations", and the Transaction Statement
on  Form  13E-3  filed  jointly  by  the  Company  and  Rotherwood,   Rotherwood
Investments  and  Mr.  Zicarelli  (Rotherwood,  Rotherwood  Investments  and Mr.
Zicarelli  are   collectively   referred  to  as  the   "Rotherwood   Entities")
incorporated by reference herein).

From  1995  through  December  31,  2001,  Cramer  paid fees to  Rotherwood  for
management  services,  including those provided by Mr. Zicarelli and Mr. Coward.
These fees  totaled  $103,900  (including  expense  reimbursements)  in 2001 and
$28,000 in 2000.  The Company  recorded a total  accrual of $101,000 at December
31,  2001 for  amounts  owed to  Rotherwood,  including  the  unpaid  portion of
management  services fees, fourth quarter 2001 letter of credit/pledge  fees and
amounts related to tax preparation fees paid by Rotherwood.  Management believes
the amounts paid and accrued for the  services  provided by  Rotherwood  were no
less  favorable than those that would be charged by third parties for comparable
services.

The Company has incurred  substantial expenses in connection with its relocation
to a smaller,  more efficient facility.  The Company has not had sufficient cash
to pay those expenses.  In November 2002 Rotherwood  advanced $125,000 to enable
the Company to pay a portion of the relocation  expenses.  Upon  consummation of
the 18  million-share  purchase by  Rotherwood,  the  $125,000  advance  will be
credited against the $900,000 purchase price for the shares.



ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) None





ITEM 14. CONTROLS AND PROCEDURES

A review and  evaluation was performed by the Company's  Acting Chief  Executive
Officer and Interim Chief  Financial  Officer (the  "Executive  Officer") of the
effectiveness of the design and operation of the Company's  disclosure  controls
and  procedures  as of a date within 90 days prior to the filing of this amended
annual report.  Based on that review and evaluation,  the Executive  Officer has
concluded that the Company's  current  disclosure  controls and  procedures,  as
designed and implemented by him, were effective.  There have been no significant
changes  in the  Company's  internal  controls  subsequent  to the  date  of his
evaluation.  There were no  significant  material  weaknesses  identified in the
course of such review and evaluation and, therefore, no corrective measures were
taken by the Company.



















<PAGE>



                                   SIGNATURES



Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the registrant has duly caused this amended report to be signed on
its behalf by the undersigned, as duly authorized.

                                  CRAMER, INC.



__________, 2003                  /s/ Nicholas M. Christianson
                                  ----------------------------------------------
                                  Acting Chief Executive Officer, Secretary and
                                  Interim Chief Financial Officer  (Principal
                                  Executive Officer and Principal Financial and
                                  Accounting Officer)

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



_________, 2003                   /s/ James R. Zicarelli
                                  ----------------------------------------------
                                  James R. Zicarelli
                                  Director



_________, 2003                   /s/ David E. Crandall
                                  ----------------------------------------------
                                  David E. Crandall
                                  Director








<PAGE>


                                 CERTIFICATIONS

     I, Nicholas Christianson,  Acting Chief Executive Officer and Secretary and
Interim Chief Financial Officer of Cramer, Inc., certify that:



1.   I have reviewed this annual report on Form 10-KSB of Cramer, Inc.;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements were made, not misleading with respect to the periods covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:



     a)   Designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

     b)   Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   Presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;



5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):



     a)   All  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and



6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.



e:  __________, 2003                By:  /s/ Nicholas Christianson
                                         ---------------------------------------
                                         Nicholas Christianson
                                         Acting  Chief  Executive   Officer  and
                                         Secretary  and  Interim Chief
                                         Financial Officer


In  connection  with this  annual  report on Form  10-KSB of  Cramer,  Inc.,  I,
Nicholas Christianson,  Acting Chief Executive Officer and Secretary and Interim
Chief  Financial  Officer of the  registrant,  hereby  certify to the best of my
knowledge and belief, that:

     (1)  This annual  report fully  complies with the  requirements  of Section
          13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2)  The information  contained in this annual report fairly  presents,  in
          all  material  respects,   the  financial  condition  and  results  of
          operations of the registrant for and as of the end of such year.


                                    By: /s/ Nicholas Christianson
                                        ----------------------------------------
                                        Nicholas Christianson
                                        Acting Chief Executive  Officer and
                                        Secretary and Interim Chief Financial
                                        Officer

Date:  __________, 2003