<PAGE>   1
                                 FORM 10-KSB\A

                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

(Mark One)

[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934 [FEE REQUIRED]   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997

                                       OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934 [NO FEE REQUIRED] for the transition 
      period from ____________ to ____________

                        Commission file number:  0-22321

                           WHEELS SPORTS GROUP, INC.
                 (Name of small business issuer in its charter)

             NORTH CAROLINA                                 56-2007717
     (State or other jurisdiction of                     (I.R.S. Employer
     incorporation or organization)                    Identification No.)
                                                     
        149 GASOLINE ALLEY DRIVE                     
       MOORESVILLE, NORTH CAROLINA                            28115
(Address of principal executive offices)                    (Zip Code)

                   Issuer's telephone number:  (704) 662-6442

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

<TABLE>
<CAPTION>
      Title of each class          Name of each exchange on which registered
      <S>                          <C>
             N/A                                       NONE
</TABLE>

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

                     COMMON STOCK, $.01 PAR VALUE PER SHARE

Check whether the issuer (1) 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  [X]  No [ ]

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

The issuer's revenues for its most recent fiscal year were $7,491,000 million.

The aggregate market value of the 2,755,416 shares of Common Stock held by
non-affiliates was $17,737,990 as of April 9, 1998.  For purposes of the
foregoing calculation only, each of the issuer's officers and directors is
deemed to be an affiliate.  The market value of the shares was calculated based
on the average bid and asked price of such shares on the Nasdaq National
Market(R) on such date.

As of April 10, 1998, 5,280,253 shares of the issuer's Common Stock were
outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE:

                                      NONE

Transitional Small Business Disclosure Format:  Yes [ ] No [X] 
<PAGE>   2
                                    PART III

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

            The directors and executive officers of the Company are as follows:

<TABLE>
<CAPTION>
    Name                                    Age    Position
    ----                                    ---    --------
    <S>                                      <C>   <C>
    Howard L. Correll, Jr.  . . . . . . .    44    Chairman of the Board and President
    Victor H. Shaffer   . . . . . . . . .    37    Interim Chief Executive Officer and Director
    W. Conrad Powell*   . . . . . . . . .    57    Executive Vice President and Director
    Randy C. Baker  . . . . . . . . . . .    38    Chief Operating Officer
    F. Scott M. Chapman   . . . . . . . .    51    Chief Financial Officer
    Randy E. Duncan   . . . . . . . . . .    37    Executive Vice President and Director
    David W. Dupree   . . . . . . . . . .    32    Vice President
    Robert J. Bove  . . . . . . . . . . .    47    Vice President
    Terry J. Powell*  . . . . . . . . . .    49    Director
    Robert G. Tomlinson   . . . . . . . .    57    Director
    Stephen M. Zimmerman  . . . . . . . .    46    Director
    Michael L. Nutting  . . . . . . . . .    56    Director
</TABLE>

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

    * W. Conrad Powell and Terry J. Powell are brothers.

         Officers are appointed by and serve at the discretion of the Board of
Directors.  Each director holds office until the next annual meeting of
stockholders or until a successor has been duly elected and qualified.

         Howard L. Correll, Jr. has served as President of the Company since
its inception, has served as Chairman of the Board since October 1993 and
served as Chief Executive Officer from the Company's inception until February
1998.  Mr. Correll co-founded the Company and served on the management
committee which functioned as a de facto Board of Directors from inception to
October 1993.  He has also served as President, Treasurer and Chairman of the
Board of High Performance and the two corporate partners of Press Pass, as
President and a director of WOR and as the Chief Executive Officer and a
director of Diamond and GRS since their respective acquisitions by the Company.
From 1989 to 1992, Mr.  Correll owned and operated Fielder's Choice Sports
Cards, a retail sports trading card sole proprietorship with two retail shops
in Winston and Statesville, North Carolina.  In early 1992, Mr. Correll sold
Fielder's Choice Sports Cards to an unaffiliated third party.  Prior to 1992,
Mr. Correll was employed by Hanes Printables, a subsidiary of Sara Lee,
Incorporated, for a period of nine years as a cost accounting manager and a
plant controller.

         Victor H. Shaffer has served as interim Chief Executive Officer since
February 1998 and served as an Executive Vice President of the Company from the
acquisition of Press Pass on December 31, 1997 until February 1998.  He has
also served as a director of the Company since February 2, 1998.  Mr. Shaffer
was a founder of Press Pass and served as its Chief Executive Officer and
President from its inception in August 1992 until December 31, 1997.  From
November 1990 to July 1992, Mr. Shaffer was employed as Vice President of
Marketing by Pro Set Inc., a privately held trading card company.  From 1986 to
1990, he was employed by Campus Network, Inc., initially as a Director of
Marketing and subsequently as Senior Vice President of Sales and Marketing.

         Randy C. Baker has served as Chief Operating Officer of the Company
since the acquisition of High Performance on October 17, 1997, and also served
as a director of the Company from February 2, 1998 to March 4, 1998.  Mr. Baker
co- founded High Performance in May 1996 and served as a director and as the
President and Chief Executive Officer of High Performance from that time until
High Performance was acquired by the Company in





                                      -2-
<PAGE>   3
October 1997.  In May 1991, Mr. Baker founded RCB Enterprises, a sourcing
company for NASCAR-related souvenirs, novelties and apparel.  Mr. Baker served
as a director and as the President and Chief Executive Officer of RCB
Enterprises from its inception until its operations were assumed by High
Performance.   From November 1985 to April 1991, Mr. Baker was a buyer for
BrodyCo., Inc., which owned and operated a chain of specialty retail stores and
which also managed certain department stores located in North Carolina.

         F. Scott M. Chapman joined the Company as its Chief Financial Officer
in March 1997.  Mr. Chapman has over 20 years experience in staff, line and
senior financial management positions in a variety of companies.  From 1995
through 1997, he served as the chief financial officer of DSAtlantic
Corporation, Winston-Salem, North Carolina, a professional design firm of
architects, engineers and surveyors.  From 1993 to 1994, he served as the
director of accounting of Enidine Incorporated, Orchard Park, New York, a
manufacturer of industrial shock absorbers.  From 1991 through 1993, Mr.
Chapman served as an independent financial consultant for a variety of business
ventures.  Mr. Chapman is a certified public accountant and was formerly
employed as an audit manager for Ernst & Young.  Mr. Chapman is a member of the
America Institute of Certified Public Accountants and the Financial Executives
Institute.

         Randy E. Duncan has served as a director of the Company since August
18, 1997 and as an Executive Vice President of the Company since its
acquisition of Diamond on June 30, 1997.  Mr. Duncan co-founded Diamond in July
1995 and has served as a director and as the President of Diamond since that
time.  From November 1994 through June 1995, he was employed by the Company in
sales and marketing positions.  From 1989 through October 1994, Mr. Duncan held
various sales and marketing positions with Motorsports Traditions, a
distributor of NASCAR-related merchandise.

         Dr. W. Conrad Powell has been the Executive Vice President and
Treasurer of the Company since its inception and has been a member of the Board
of Directors since October 1993.  Dr. Powell was also a co-founder of the
Company and served on the management committee which functioned as a de facto
Board of Directors from inception to October 1993.  He has also served as a
director of Diamond, WOR and GRS since their respective acquisitions by the
Company.  In 1979, Dr.  Powell founded an antique and sports collectible
business, Chic Antiques d/b/a Columbia Antique Mall, located in Columbia, South
Carolina.  Chic Antiques both wholesales and retails antiques and sports
collectibles.  Dr. Powell also served as a Professor of Education in the
Leadership and Development Department at the University of South Carolina for
16 years.

         David W. Dupree has served as a Vice President of the Company since
October 17, 1997.  From February 1994 until the formation of High Performance,
he served as the Executive Vice President of RCB Enterprises, a sourcing
company for NASCAR-related souvenirs, novelties and apparel.  In May 1996, Mr.
Dupree and Mr. Baker co-founded High Performance, which assumed and expanded
the business of RCB Enterprises.  Mr. Dupree served as the Executive Vice
President and as a director of High Performance from its inception until it was
acquired by the Company.  From February 1993 to February 1994, Mr. Dupree was
the National Sales Manager of DECO Sign Products.  From November 1991 to
February 1993, he was a sales representative for 3M Pharmaceuticals.  From
October 1988 to November 1991, Mr. Dupree was the Director of Fraternity
Services for the Kappa Alpha Order.

         Robert J. Bove has served as a Vice President of the Company since
December 31, 1997.  Mr. Bove served as Vice President for Sales of Press Pass
from December 1992 until December 31, 1997.  From January 1989 to September
1992, he served as Vice President of Sales for The Upper Deck Company, a
trading card manufacturer.  Mr. Bove held a variety of positions with Nestle
Foods Company from February 1977 to January 1989, including Senior National
Accounts Manager.  From February 1972 to February 1977, he was a sales
supervisor for Cambell Taggert, a bakery manufacturer.

         Terry J. Powell has served as a director of the Company since October
1993.  Mr. Powell was a co-founder of the Company and served on the management
committee which functioned as a de facto Board of Directors from inception to
October 1993.  He also has served as a director of WOR since its acquisition by
the Company.  In 1990, Mr. Powell founded Village Antiques, a sole
proprietorship which operates a retail antique store in Asheville, North
Carolina.  From 1980 to 1989, Mr. Powell was engaged in commercial real estate
development in North Carolina and





                                      -3-
<PAGE>   4
South Carolina.  Mr. Powell also was a licensed real estate broker in the State
of South Carolina from 1974 through 1989.

         Robert G. Tomlinson has served as a director of the Company since
April 1997.  He has served as Chairman of the Board and Chief Executive Officer
of Sport-Haley, Inc. since October 1992.  Sport-Haley is a publicly-traded
manufacturer of fashion golf apparel sold through golf professional shops in
the United States and internationally.  Mr.  Tomlinson was a partner in
Tomlinson Enterprises, a real estate investment partnership, from 1972 through
1993.  From 1989 until he joined Sport-Haley, Mr. Tomlinson was also engaged in
management of his personal investment portfolio.

         Stephen M. Zimmerman has served as a director of the Company since May
1997.  In 1984, Mr. Zimmerman founded Zimmerman Company, Inc., a company which
manufactures, imports and exports decorative fabric.  Since that time, he has
served as the Chief Executive Officer and Chairman of the Board of Zimmerman
Company, Inc.  From 1978 to 1984, Mr.  Zimmerman held various positions with
L.A. Marsha, a textile company, most recently as National Sales Manager.  From
1976 to 1978, he engaged in real estate development activities and from 1974 to
1976 he held various sales positions with A.H. Robbins Pharmaceuticals.

         Michael L. Nutting has served as a director of the Company since
October 1997.  Since 1963, Mr. Nutting has held certain positions with
subsidiaries or divisions of RJR Nabisco.  He currently serves as Vice
President of Business Development for R.J. Reynolds Sports Marketing
Enterprises, the sports marketing division of R.J. Reynolds Tobacco Company.
R.J. Reynolds Sports Marketing Enterprises manages sponsorships for the Winston
Cup, Winston Drag and Winston Racing Series as well as six racing teams.

BOARD COMMITTEES

         The Board of Directors maintains a Compensation Committee, an Audit
Committee and an Executive Committee.  The Compensation Committee is composed
of Messrs. Terry J. Powell, Tomlinson and Zimmerman, all of whom are
non-management directors.  The Audit Committee is composed of Messrs. Nutting,
Zimmerman and Correll.  The Executive Committee is composed of Messrs. Correll,
Tomlinson and Duncan.

         The primary function of the Compensation Committee is to review and
make recommendations to the Board with respect to the compensation, including
bonuses, of officers and to administer the Omnibus Stock Plan.  The
Compensation Committee held one meeting in the 1997 fiscal year and took action
by unanimous consent at other times during the year.

         The function of the Audit Committee is to review and approve the scope
of audit procedures employed by the Company's independent auditors, to review
and approve the audit reports rendered by the Company's independent auditors
and to approve the audit fee charged by the independent auditors.  The Audit
Committee reports to the Board of Directors with respect to such matters and
recommends the selection of independent auditors.  The Audit Committee held no
formal meetings in 1997 fiscal year but met informally at various times during
the year.

         The Executive Committee was established in 1997 to allow certain
actions to be taken without the full Board's review.  The Executive Committee
may not authorize distributions; approve the submission of any matter for
shareholders action; fill vacancies on the Board of Directors or any committee
thereof; amend the Articles of Incorporation; adopt, amend or repeal the
Bylaws; approve a plan of merger; authorize or approve the reacquisition of
shares unless pursuant to a formula or method prescribed by the Board of
Directors; authorize or approve the issuance or sale of shares; contract for
the sale of shares; or determine the designations and relative rights,
preferences and limitations of a class or series of shares.  In the 1997 fiscal
year, the Executive Committee held no formal meetings after its formation on
July 18, 1997 but met informally at various times subsequent to its formation.

         In the 1997 fiscal year, the Board of Directors held 5 formal meetings
and numerous informal and telephonic meetings.  All directors attended more than
75% of the aggregate of board and committee meetings held during the 1997 fiscal
year.





                                      -4-
<PAGE>   5
ITEM 10.  EXECUTIVE COMPENSATION

         Summary Compensation Table.  The following table provides certain
summary information concerning compensation paid or accrued to Howard L.
Correll, Jr., the Company's Chief Executive Officer during the 1997 fiscal
year, and each of the four other most highly compensated executive officers
whose combined annual salary and bonus exceeded $100,000 during the 1997 fiscal
year (referred to as the "Named Officers").

<TABLE>
<CAPTION>
                                                                              LONG TERM COMPENSATION
                                                                              ----------------------
                                                  ANNUAL COMPENSATION                  AWARDS    
                                        --------------------------------------     --------------
  NAME AND PRINCIPAL           FISCAL                             OTHER ANNUAL  SECURITIES UNDERLYING   ALL OTHER
       POSITION                 YEAR       SALARY      BONUS      COMPENSATION     OPTIONS/SARS(#)     COMPENSATION
------------------------       ------   -----------  ---------    ------------     ---------------     ------------
<S>                             <C>      <C>         <C>           <C>                <C>               <C>
Howard L. Correll, Jr.          1997     $180,417         -0-      $ 23,200(2)        82,500(1)             -0-
 Chief Executive Officer        1996      150,000         -0-        22,800(2)           -0-                -0-
 and President                  1995      150,000         -0-        22,400(2)           -0-                -0-

Randy C. Baker,                 1997     $156,923         -0-        25,200           50,000                -0-
 Chief Operating Officer        (3)

Randy E. Duncan,                1997     $ 82,683    $105,000      $ 13,600(2)        15,000(1)             -0-
 Executive Vice President       (4)

Victor Shaffer,                 1997     $267,000    $ 12,420           -0-           15,000(1)             -0-
 Executive Vice President       (5)

David W. Dupree,                1997     $120,000    $ 21,000        10,800(2)        15,000         $1,588,000(6)
 Vice President                 (3)
</TABLE>

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

(1)  Excludes options granted or proposed to be granted which were subsequently
     cancelled or never granted.

(2)  Comprised of costs attributable to vehicles provided for use by the
     officer and/or his spouse and, for Messers Correll and Duncan, life
     insurance premiums for insurance policies for which the Company is not a
     beneficiary.

(3)  Messrs. Baker and Dupree were first employed as executive officers of the
     Company in October 1997 upon the Company's acquisition of High
     Performance.  The 1997 compensation shown above includes compensation paid
     by High Performance prior to the acquisition.

(4)  Mr. Duncan was first employed as an executive officer of the Company in
     June 1997 upon the Company's acquisition of Diamond.  The 1997
     compensation shown above includes compensation paid by Diamond prior to
     the acquisition.

(5)  Mr. Shaffer was first employed as an executive officer of the Company on
     December 31, 1997 upon the Company's acquisition of Press Pass.  The 1997
     compensation shown above includes compensation paid by Press Pass prior to
     the acquisition.

(6)  Prior to its acquisition by Wheels, High Performance paid Mr. Dupree a
     non-recurring bonus of $368,000 in cash and $1,220,000 in High Performance
     stock.

         Option Grants Table.  The following table sets forth information on
grants of stock options pursuant to the Company's 1997 Omnibus Stock Plan
during fiscal 1997 to the Named Officers.

<TABLE>
<CAPTION>
                            NUMBER OF SECURITIES          PERCENT OF TOTAL          EXERCISE OR
                             UNDERLYING OPTIONS/      OPTIONS/SARS GRANTED TO       BASE PRICE         EXPIRATION
       NAME                    SARS GRANTED(1)     EMPLOYEES IN FISCAL YEAR(1)(2)    ($/SHARE)            DATE       
-----------------------     --------------------   ------------------------------   -----------        ----------
<S>                                <C>                         <C>                    <C>               <C>
Howard L. Correll, Jr.             82,500                      16.5%                  $ 6.49             4/16/02
Randy C. Baker                     50,000                      10.0%                  $ 8.25            10/30/07
Randy E. Duncan                    15,000                       3.0%                  $ 7.00             6/30/02
Victor H. Shaffer                  15,000                       3.0%                  $ 5.75            12/30/07
David W. Dupree                    15,000                       3.0%                  $ 8.25            10/30/07
</TABLE>

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

(1)  Excludes options granted or proposed to be granted which were subsequently
     cancelled or never granted.

(2)  Includes options granted to employees of Wheels and the Acquired
     Companies.





                                      -5-
<PAGE>   6
         Fiscal Year-End Options/Option Values Table.

<TABLE>
<CAPTION>
                                                            NUMBER OF SECURITIES UNDER-     VALUE OF UNEXERCISED IN-
                                                            LYING UNEXERCISED OPTIONS/       THE MONEY OPTIONS/SARS
                            SHARES                          SARS AT FISCAL YEAR-END(1)     AT FISCAL YEAR-END($)(1)(2) 
                           ACQUIRED         VALUE           --------------------------     ---------------------------
       NAME               ON EXERCISE      REALIZED         EXERCISABLE UNEXERCISABLE      EXERCISABLE  UNEXERCISABLE
------------------        -----------      --------         ----------- -------------      -----------  -------------
<S>                         <C>              <C>              <C>           <C>               <C>          <C>
Howard L. Correll, Jr.      -0-              -0-              82,500        -0-               $ -0-        $  -0-
Randy C. Baker              -0-              -0-              50,000        -0-               $ -0-        $  -0-
Randy E. Duncan             -0-              -0-              15,000        -0-               $ -0-        $  -0-
Victor H. Shaffer           -0-              -0-              15,000        -0-               $ -0-        $  -0-
David W. Dupree             -0-              -0-              15,000        -0-               $ -0-        $  -0-
</TABLE>

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

(1)  Excludes options granted or proposed to be granted which were subsequently
     cancelled or never granted.

(2)  None of the options held by the Named Officers were in-the-money at the
     fiscal year end, as the exercise price of the options was equal to or in
     excess of the closing price for the Company's Common Stock of $5.75 on
     December 31, 1997.

         No employee of the Company receives any additional compensation for
his services as a director. Employee directors receive no salary for their
services as such, but non-employee directors receive a fee of $1,500 per year.
The Board of Directors has also authorized payment of reasonable travel or
other out-of-pocket expenses incurred by non- management directors in attending
meetings of the Board of Directors.

EMPLOYMENT AGREEMENTS

         In January 1997, the Company entered into an employment agreement with
Howard L. Correll, Jr.  The employment agreement requires that Mr. Correll
devote full business time to the Company, may be terminated by the Company for
"cause" (as defined in the employment agreement) and calls for Mr. Correll to
receive an annual salary of $165,000.  The employment agreement extends for a
three-year term.  The employment agreement provides for a bonus to be
determined by the Compensation Committee of the Board of Directors and contains
a non-compete clause covering the term of the agreement and for a period of one
year after termination or expiration of the agreement.  Mr. Correll is also
entitled to receive lump sum compensation equal to approximately three times
his annual salary and bonus in the event of a non- negotiated change in control
of the Company.  In October 1997, the Compensation Committee approved an
increase in Mr.  Correll's salary to $250,000 effective November 1, 1997.  Mr.
Correll will resign upon the effective time of the proposed negotiated merger 
with Racing Champions Corporation.  See "Item 1.  Description of Business - The 
Proposed Acquisition."

         Messrs. Baker and Dupree, and Mr. Shaffer, each entered into
employment agreements with the Company upon the acquisition of High Performance
and Press Pass, respectively.  The basic terms of their respective agreements
are substantially identical to those of Mr. Correll with respect to devotion of
their full business time to the Company, termination by the Company for
"cause", a three-year term, a bonus to be determined by the Compensation
Committee of the Board of Directors, a non-compete clause covering the term of
the agreement and for a period of one year after termination or expiration of
the agreement, and lump sum compensation equal to approximately three times
their annual salaries and bonuses in the event of a non-negotiated change in
control.  The employment agreements call for Messrs.  Baker, Dupree and Shaffer
to receive annual salaries of $200,000, $175,000 and $190,000, respectively,
commencing on the date of their respective employment.  In addition, Messrs.
Baker, Dupree and Shaffer were granted stock options to purchase 50,000, 15,000
and 15,000 shares of the Company's Common Stock, respectively, at an exercise
price equal to the fair market value on the date their employment commenced.

         Mr. Duncan entered into an employment agreement with Diamond
commencing upon the acquisition of Diamond by the Company.  Mr. Duncan's
agreement provides for termination for "cause", a three-year term, a bonus to
be determined by the Compensation Committee of the Board of Directors, and a
non-compete clause covering the





                                      -6-
<PAGE>   7
term of the agreement and for a period of six months after termination or
expiration of the agreement.  The employment agreement, as amended effective
December 1, 1997, provides for an annual salary of $200,000.  In connection
with his employment agreement, Mr. Duncan was granted stock options to purchase
15,000 shares of the Company's Common Stock at an exercise price of $7.00.

STOCK OPTION PLAN

         The Company adopted its 1996 Omnibus Stock Plan in December 1996 (the
"Option Plan").  An aggregate of 1,100,000 shares of Common Stock are currently
reserved for issuance under the Option Plan.

         The Option Plan provides for the granting of incentive stock options
("Incentive Stock Options") within the meaning of Section 422A of the Internal
Revenue Code of 1986, as amended (the "Code") and non-qualified stock options.
Non-qualified stock options may be granted to employees, directors and
consultants to the Company, while Incentive Stock Options may be granted only
to employees.  The Option Plan is currently administered by the Compensation
Committee of the Board of Directors, which determines the terms and conditions
of the options granted under the Option Plan, including the exercise price,
number of shares subject to the option and the exercisability thereof.

         The exercise price of all Incentive Stock Options granted under the
Option Plan must be at least equal to the fair market value of the Common Stock
of the Company on the date of grant, and must be 110% of fair market value when
granted to a 10% or more stockholder.  The exercise price of all non-qualified
stock options granted under the Option Plan shall be not less than 85% of the
fair market value of the Common Stock on the date of grant.  The term of all
options granted under the Option Plan may not exceed ten years, except the term
of Incentive Stock Options granted to a 10% or more stockholder may not exceed
five years.  The Option Plan may be amended or terminated by the Board of
Directors, but no such action may impair the rights of a participant under a
previously granted option.

         The Option Plan provides the Board of Directors or the Compensation
Committee with the discretion to determine when options granted thereunder
shall become exercisable and the vesting period of such options.  Upon
termination of a participant's employment relationship or directorship with the
Company, all unvested options terminate and are no longer exercisable.  Vested
non-qualified options remain exercisable for a period one month to 12 months
following the termination date depending upon the reason for termination.

         The Option Plan provides that, in the event the Company enters into an
agreement providing for the merger of the Company into another corporation or
the sale of substantially all of the Company's assets, any outstanding
unexercised option shall become immediately exercisable as of the date of such
agreement.  Upon the consummation of the merger or sale of assets such options
shall terminate unless they are assumed or another option is substituted
therefor by the successor corporation.

         As of December 31, 1997, 914,500 options were outstanding under the
Option Plan, at exercise prices ranging from $5.02 to $8.25. Subsequent to
December 31, 1997, 417,000 options were canceled.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Under the securities laws of the United States, the Company's
directors, its executive officers, and any persons holding more than ten
percent of the Company's Common Stock are required to report their initial
ownership of the Company's Common Stock and any subsequent changes in that
ownership to the Commission and the Company.  Specific due dates for these
reports have been established and the Company is required to disclose any
failure to file, or late filing, of such reports.  Based solely on management's
review of Forms 3, 4 and 5 and amendments thereto furnished to the Company and
written representations with respect to filing of such Forms, the Company
believes that the Form 3 reports filed by Messrs. Zimmerman, Duncan, Nutting,
Shaffer, and Bove upon their respective





                                      -7-
<PAGE>   8
appointments or election as an executive officer or director were filed late.
The Company also believes that a Form 5 to report the grant of options was
filed one day late by W. Conrad Powell, Terry J. Powell and Mr. Zimmerman.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information regarding
beneficial ownership of the Company's Common Stock as of April 29, 1998 by (i)
each person who is known by the Company to own beneficially more than 5% of the
Company's outstanding Common Stock, (ii) each of the Company's executive
officers and directors, and (iii) all executive officers and directors as a
group.  Common Stock not outstanding but deemed beneficially owned because an
individual can acquire shares within 60 days are treated as outstanding when
determining the amount and percentage of Common Stock owned by such individual.
Each person has sole voting and sole investment power with respect to the
shares shown except as noted.

<TABLE>
<CAPTION>
                                                                                     SHAREHOLDINGS ON APRIL 29, 1998
                                                                                     -------------------------------
                                                                                        NUMBER OF      PERCENT OF
     NAME AND ADDRESS (1)                                                                SHARES           CLASS   
-------------------------------                                                        -----------     -----------
<S>                                                                                     <C>               <C>
Howard L. Correll, Jr.(2) . . . . . . . . . . . . . . . . . . . . . . . . . . .           779,237         14.5%
Victor H. Shaffer(3)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           144,342          2.7
Randy C. Baker(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           427,778          8.0
F. Scott M. Chapman(5)  . . . . . . . . . . . . . . . . . . . . . . . . . . . .            12,500          *
Randy E. Duncan(3)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           160,500          3.0
W. Conrad Powell(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           549,803         10.0
David W. Dupree(3)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            81,667          1.5
Robert J. Bove(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            33,640          *
Terry J. Powell(8)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           527,303          9.9
Robert G. Tomlinson(5)  . . . . . . . . . . . . . . . . . . . . . . . . . . . .            50,000          *
Stephen M. Zimmerman(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . .            57,434          1.1
Michael L. Nutting(10)  . . . . . . . . . . . . . . . . . . . . . . . . . . . .               133          *
All directors and officers as a group (twelve persons)(11)  . . . . . . . . . .         2,824,337         50.6
</TABLE>

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

* Less than 1%

(1)  The address for Messrs. Correll, Shaffer, Baker, Chapman, Duncan, W.
     Conrad Powell, Dupree and Bove is 149 Gasoline Alley, Mooresville, North
     Carolina 28115; the address for Terry J. Powell is 23 Sunset Terrace,
     Asheville, North Carolina 28801; the address for Mr. Tomlinson is 4600
     East 48th Avenue, Denver, Colorado 80216; the address for Mr.  Zimmerman
     is 212 Candi Lane, Columbia South Carolina 29210; and the address for Mr.
     Nutting is P.O. Box 484, Winston-Salem, North Carolina 27102.

(2)  Includes 120,303 shares of Common Stock held in escrow subject to release
     in 2003 and currently exercisable options to purchase 82,500 shares of the
     Company's Common Stock.  Also includes currently exercisable options held
     by Mr.  Correll's spouse, who is an employee  of the Company, to purchase
     7,000 shares of the Company's Common Stock.  Mr.  Correll disclaims
     beneficial ownership of options held by his father to purchase 2,000
     shares of the Company's Common Stock.

(3)  Includes currently exercisable options to purchase 15,000 shares of the
     Company's Common Stock.

(4)  Includes currently exercisable options to purchase 50,000 shares of the
     Company's Common Stock.

(5)  Consists solely of currently exercisable options.

(6)  Includes 90,227 shares of the Company's Common Stock held in escrow
     subject to release in 2003 and currently exercisable options to purchase
     32,500 shares of the Company's Common Stock.

(7)  Includes currently exercisable options to purchase 10,000 shares of the
     Company's Common Stock.

(8)  Includes 90,227 shares of the Company's Common Stock held in escrow
     subject to release in 2003 and currently exercisable options to purchase
     18,500 shares of the Company's Common Stock.

(9)  Includes 7,576 shares of the Company's Common Stock held in escrow subject
     to release in 2003 and warrants to purchase 7,000 shares of the Company's
     Common Stock.  The amounts shown include securities owned of record by Mr.
     Zimmerman's minor children and by a retirement plan for the benefit of Mr.
     Zimmerman.

(10) Excludes 9,750 shares of the Company's Common Stock owned by Mr. Nutting's
     son, who is an employee of the Company, as to which Mr. Nutting disclaims
     beneficial ownership.

(11) Includes 308,333 shares of the Company's Common Stock held in escrow
     subject to release in 2003 and currently exercisable options to purchase
     299,500 shares of the Company's Common Stock.





                                      -8-
<PAGE>   9
ESCROW SHARES

         As a condition to the Company's initial public offering, certain of
the Company's stockholders were required to deposit a portion of their shares
of the Company's Common Stock owned by them (on a pro-rata basis) in escrow
pursuant to an escrow agreement with American Securities Transfer & Trust, Inc.
The Common Stock currently held in the escrow account was subject to release at
the earlier of (i) the achievement of $.44 earnings per share in the fiscal
year ended December 31, 1997 or (ii) December 31, 2003.  The 1997 earnings per
share condition was not satisfied and accordingly, those shares will remain in
escrow until December 31, 2003.  The shares held in escrow are not transferable
or assignable, although they may be voted by the holder.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         As described below, the Company has entered into transactions with
officers and directors in the past.  The Company has a policy that transactions
with directors, officers or entities of which they are also officers or
directors or in which they have a financial interest, will generally be on
terms consistent with industry standards and approved by a majority of the
disinterested directors of the Company's Board of Directors.  No such
transactions by the Company are to be either void or voidable solely because of
such relationship or interest of directors or officers or solely because such
directors are present at the meeting of the Board of Directors of the Company
or a committee thereof which approves such transaction or solely because their
votes are counted for such purpose.  In addition, interested directors may be
counted in determining the presence of a quorum at a meeting of the Board of
Directors of the Company or a committee thereof which approves such a
transaction.  Any such transactions will be on terms believed to be no less
favorable than could be obtained from unaffiliated parties.

         For taxable periods beginning on and after February 11, 1992 and
ending on December 31, 1996, the Company was subject to taxation under
Subchapter S of the Internal Revenue Code of 1986, as amended.  As a result,
the net income of the Company during that period was taxed for federal and
state income tax purposes directly to the stockholders  rather than to the
Company.  The Company made cash distributions to its stockholders to provide
them with sufficient funds to pay personal income tax liability as a result of
the Company's net income attributed to each of them, including a $128,000
distribution to Mr. Correll and a $96,000 distribution to each of W. Conrad
Powell and Terry J. Powell in April 1997.

         Mr. Correll and W. Conrad Powell personally guaranteed the repayment
of bank loans which the Company obtained in September 1996 and in April 1997
for use as working capital.  Neither of them received any consideration for
providing such guarantees and such loans were repaid during 1997.  Messrs.
Correll, Baker and Duncan have each guaranteed the Company's obligations under
a $700,000 unsecured loan from People's Bank which was assumed in connection
with the acquisition of High Performance.  None of the guarantors received any
consideration for providing such guarantees.

         In December 1996, the Company borrowed $50,000 from Terry J. Powell
and $100,00 from Mr. Zimmerman, both of whom are directors and stockholders of
the Company.  The advances bore interest at 18% per annum, were unsecured and
were repaid in the 1997 fiscal year.  Proceeds of such borrowings were used to
reduce accounts payable and to pay expenses associated with the Company's
initial public offering.

         The Company leases two of its facilities from related parties.  The
facility which now serves as the Company's principal executive office was
formerly occupied by High Performance and is leased from Beale Street Realty,
Inc., which is owned by Randy C. Baker, an executive officer of the Company.
The lease on this facility of 40,000 square feet extends to February 28, 2012
and the currently monthly rental is $16,170.  The lease payment is to escalate
in accordance with the consumer price index during the term of the lease.  The
Company also entered into a lease for a





                                      -9-
<PAGE>   10
small retail facility in South Boston, Virginia from Harold Green, who is an
executive officer of GRS, when GRS was acquired in October 1997.  The lease is
for a one year term and the monthly rental is $500.  The Company incurred
rental expense on these leases of $51,598 and $15,400 during the 1997 and 1996
fiscal years, respectively.

         The Company entered into a lease for a building on October 1, 1996,
with a company owned by three of the former shareholders of Diamond, including
Mr. Duncan.  The lease term was for three years with an option to purchase the
building during the lease and a mandatory purchase requirement at the end of
1999.  Minimum monthly lease payments were $2,400.  Lease payments,
representing interest, made during the 1997 and 1996 fiscal years were $19,200
and $9,200, respectively.  In August 1997, the Company exercised its right to
purchase the building for approximately $308,000 and the lease obligation
ceased.  In the first quarter of the 1998 fiscal year, the Company sold this
property to an unaffiliated third party for $326,000.





                                      -10-
<PAGE>   11
                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                  WHEELS SPORTS GROUP, INC.
                                   
                                  By: /s/ VICTOR H. SHAFFER             
                                     -----------------------------------
                                      Victor H. Shaffer, Interim 
                                      Chief Executive Officer

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.

<TABLE>
<CAPTION>
              SIGNATURE                                          TITLE                                     DATE       
 -----------------------------------------        ------------------------------------------          --------------
  <S>                                             <C>                                                 <C>
  /s/ Victor H. Shaffer                           Interim Chief Executive Officer (Principal          April 30, 1998
-----------------------------------------         Executive Officer) and Director
      Victor H. Shaffer                           


                                                  Chairman of the Board, President and                              
-----------------------------------------         Director
      Howard L. Correll, Jr.                      


  /s/ F. Scott M. Chapman                         Chief Financial Officer (Principal                  April 30, 1998
-----------------------------------------         Accounting Officer and Principal
      F. Scott M. Chapman                         Financial Officer)


  /s/ W. Conrad Powell                            Executive Vice President and Director               April 30, 1998
----------------------------------------- 
      W. Conrad Powell


                                                  Vice President and Director                                        
----------------------------------------- 
      Randy E. Duncan


  /s/ Terry J. Powell                             Director                                            April 30, 1998
----------------------------------------- 
      Terry J. Powell


  /s/ Robert G. Tomlinson                         Director                                            April 30, 1998
----------------------------------------- 
      Robert G. Tomlinson


  /s/ Stephen M. Zimmerman                        Director                                            April 30, 1998
----------------------------------------- 
      Stephen M. Zimmerman


                                                  Director                                                          
----------------------------------------- 
      Michael L. Nutting
</TABLE>





                                      -11-